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A negative externality causes private markets to produce a level of output that is :
1) equal to the efficient level of output
2) greater than the efficient level of output
3) less than the efficient level of output
4) not beneficial to anyone.
The newly established Bureau of Time Travel has been given authority to regulate time travel. If the bureau sets a price that allows Time Riders to earn a normal profit (that is, a fair return), illustrate what price will time travelers pay per tr..
Assume that three years ago, you purchased a corporate bond that pays 5.50 percent. The purchase price was $1,000. Also assume that three years after your bond investment, comparable bonds are paying 6.00 percent. What is the annual dollar amount of ..
Government fiscal policy and international trade seem to be linked. Let’s investigate their relationship. Say a government is currently running a budget deficit and decides to cut taxes, increase spending, or both. Explain how this will affect intere..
You are the manager of a monopolistically competitive firm. The present inverse demand curve you face is P = 100 – 4Q (MR = 100 – 8R). Your cost function is C(Q) = 50 + 8.5Q2 and MC(Q) = 17Q. What level of output should you choose to maximize profits..
One family of social dilemmas arises where a group of people are involved in some task that depends on the efforts of each of them. The strategy choices are work or shirk. In an effort dilemma, one persons shrinking places the burden of increased eff..
Calculate the consumer surplus, the producer surplus, and the total welfare for the competitive equilibrium determined in part (a) of this question.
Suppose that there is a natural disaster that destroys part of the nations capital stock. Determine the effect on aggregate output, consumption, employment, and the real wage, with reference to income and substitution effects, and explain your result..
Explain how convinced are you that the new 30-gallon trash bag is the strongest such bag on the market.
During the most recent recession General Motors and Chrysler lost huge sums of money in their operation (not counting government bailout money they could not assume they would get). How could they continue to operate at a loss?
The currency of Iceland is called the Krona. in July, 2007 the exchange rate was roughly 60 krona to a dollar. In July 2011, the exchange rate was roughly 120 krona to a dollar. a) Over this period, would you expect exports from the US to Iceland to ..
Ngela owes $500 on a credit card and $2,000 on a student loan. The credit card has a 15 percent annual interest rate and the student loan has a 7 percent annual interest rate. Her sense of loss aversion makes her more anxious about the larger loan. S..
Sheryl spends all her leisure time and all her money on sailing. She doesn’t value leisure time if she can’t sail, and she can only sail if she has leisure time. How many hours will she work if she earns $20 per hour? Find a formula for her labor sup..
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