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The number of times that a person contracts a cold in a given year is a Poisson random variable with parameter λ=6 . However a new drug has just been marketed that reduces the Poisson parameter to λ=3 for 35 % the population. For the other 65 % of the population, the drug has no effect on colds. If an individual tries the drug for a year and has 3 colds in that time, how likely is it that the drug is beneficial for him?
Entry of firms in a monopolistically competitive industry is characterized by two "external" effects. What are these effects and how do they affect a monopolistically competitive firm. How are consumers and incumbent firms influenced by these externa..
An office supply company has purchased a light-duty delivery truck for $15,000. It is anticipated that the purchase of the truck will increase the company’s revenue by $10,000 annually, while the associated operating expenses are expected to be $3,00..
Two investment opportunities are as follows: For A: First cost = $150, Uniform annual benefit = 25, End-of-useful-life salvage value = 20, Useful life = 15 years. At the end of 10 years, Alt. B is not replaced. Thus, the comparison is 15 years of A v..
Quantity effect of a specific tax. A regulator plans to impose a specific tax on a previously unregulated monopolist. Before imposing the tax, they want to know what the change in quantity produced will be from such a tax. The proposed specific tax i..
Describe the DEAL Model of critical thinking - How is civic capacity intertwined with service-learning - Are there differences between service-learning and volunteering? If so, what are those differences?
If you want to withdraw $20,000 at the end of three years and $50,000 at the end of five years, how much should you deposit now into an account that pays 8% interest compounded annually?
Characteristic of a flexible exchange system. Interest rate expectations under interest rate parity, assume interest rate holds what happens to exchange rates. Explain how the environment of a multinational impacts repatriation of foreign profits.
A price floor is introduced on a market and creates a deadweight loss. Knowing the market demand curve is P = 100 − 3Q and the market supply curve is P = 20 + Q, find the price floor that will result in a deadweight loss of DWL = 200/9 . (P^f = 50)
Elucidate each event whether it changes short-run aggregate supply, long-run aggregate supply, aggregate demand, or some combination of them.
Identify the strongest two arguments in favor of such a tax and the strongest two arguments against such a tax.
If the equation that represents the quantity demanded as a function of price is Qd=20-1.25p and the equation that represents inverse supply is p=1+Qs/5
Using the supply and demand equations below, calculate the impact of a proposed $20.00 tariff. What will be the loss in government revenue? What will be the increase in consumer surplus? What will be the increase in overall wealth for the country?
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