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Government sometimes provide subsidies to specific industries; that is, they reduce a domestic firms cost so that it can sell products on the international market at a lower price. What reasons do governments use for these government subsidies?
Illustrate what is the smallest value of x that would be sucient to make Buck want to invest in the pinball palace rather than have a wealth of $24,000 with certainty.
Ashley works for McKennel and Associates, a large business consulting firm. ABC Company has developed, according to industry sources, a new process of building low-emission, high mileage gas engines for automobiles. XYZ, a competitor of ABC, hires As..
Since November 2011, the Reserve Bank has lowered the cash rate on eight separate occasions from 4.75% to 2.5%. Clearly, the Bank has become far less concerned about inflation and is giving a much greater emphasis to unemployment in its policy reacti..
At the beginning of the 20th century almost two out of every five working Americans worked in agriculture. Today this number has fallen to less than one in fifty. At the same time, the total value of agricultural production represents an ever smaller..
You are the manager of the surgery department at a hospital which serves mostly Medicare patients. The hospital performs 1,000 surgical operations per year using the traditional method. Compute the total revenue, the total cost, and the profit at the..
Explain using the labor/leisure model and words, how a progressive income tax will affect the budget constraint of the worker and their behavior or how a tax preference (tax deduction) will affect consumption choices.
Suppose that Sally has 112 hours of time per week to allocate between market work and household time, earns a wage of $12 per hour if she works, and receives $30 per week in non-labor income. Graph Sally's budget constraint. If Sally's market wage we..
Describe what will happen in the market in the following situations.. Will there be a shortage or excess? Identify an example of a price floor.
What are the costs of inflation? Which of these costs do you think are most important for the U.S. economy? What are your shoe leather costs of going to the bank? How might you measure these costs in dollars? How do you think the shoe leather costs o..
A newspaper has a monopoly on the local news market in a town. The market demand is given by P=1.70-Q/20,000, making the marginal revenue MR=1.70-Q/10,000. The marginal cost is constant at equal to 0.80. The fixed cost is 2,000. So, the total cost is..
Critics argue that countries relying on primary exports will experience problems of fluctuating and declining terms of trade. Explain the theory and evidence behind these arguments, and how these problems can reduce the gains from primary export t..
If there are n firms in the marketplace also every firm charges p. Illustrate what is total producer surplus.
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