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1. What is the externality associated with an individual driving on a congested highway? How do tolls help alleviate this externality? How should tools be set? (Hint: would you always want the toll to be the same all day?)
2. The steel industry pollutes the atmosphere as a consequence of its production process. Is it possible that it would be better for society that steel is produced by a monopolist instead of a set of perfectly competitive firms?
3. Farmers irrigate their crops by drilling wells into the aquifer. As farmers pump more and more water from the the aquifer, all must frill deeper to reach water: and the deeper the well, the more costly it is to pump the water
a) Identify the missing property rights in this instance
b) Is there an economic argument for limiting the amount of water farmers can pump from their wells?
Illustrate what fiscal and monetary policies would you recommend in order to close a recessionary gap. Would you recommend what expansionary polices.
Smoking cigarettes is a leading cause of many diseases. The government has opened several public clinics that treat smoking-related diseases and is trying to decide how to fund these clinics. 2.2. Another suggestion is to get the funds for the public..
How much interest is in the sixty-fourth payment? How much principal? D. How much interest is in the sixty-eighth payment? How much principal?
KING Airlines has determined that the price elasticity of demand for two customer segments (Business Class and Coach) is -1.50 and -1.75. Based on their expectations of profitability, KING realizes the price of a Coach Seat should be $155 (one way). ..
Illustrate what does the evolution of Coke's strategy tell you about the convergence of consumer tastes and preferences.
Mary has borrowed $125,000 at 8% from her parents. She is asking Kevin for $75,000 to start her own business. Kevin requires that the business make a 12% rate of return. What is Mary's before-tax cost of capital?
Historically, the focus of civil rights policy has been on which of the following groups?
Describe why some long-run average cost curves are steeper on the downward side than others.
Define three types of elasticity of demand. Indicate how you would use information from recent research paid by your company that the own price elasticity of your product is -1.2 and not -0.8 as previously thought.
Define optimistic, most likelys, and pestimistic scenarios buy using both optimistic, both most likely and both pestimistic estimates. Use a life of 4 years as the most likey value. What is the present worth for each scenario
If the entry barrier is removed consumers will be better off because consumers will enjoy greater consumer surplus. Explain.
The equations representing demand as well as, inverse demand as well as, supply as well as inverse supply are as follows.
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