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A factory is located next to a farmer, and sometimes emits pollution that damages the farmer’s crops that are adjacent to the factory. The crop damage can be reduced if the factory installs a scrubber, if the farmer moves her crops, or both. The following table summarizes the cost of the various possible actions, and the crop damage, if any:
Action Crop Damage ($) Farmer’s cost ($) Factory’s Cost ($)
No action 100 0 0
Farmer moves crops 40 10 0
Factory installs scrubber 25 0 30
Farmer moves crops and factory installs scrubber 0 10 30
If instead she travels to Florida the trip will give her 8,000 units of utility and will cost her only $200. Joan will do best going to?
Consider two rms facing the demand curve P = 50- 5Q where Q = Q1 +Q2 . The rms cost functions are C1 (Q1 ) = 20 + 10Q1 and C2 (Q2 ) = 10 + 12Q2. If they collude, how much will each firm produce? What would be each firm's prot?
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A piece of construction machinery costs $5000 and has an anticipated $1000 salvage value at the end of its five year depreciable life. Compute the depreciation schedule for the machine by: Straight line depreciation;
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Applying the Bond Market Model explain completely how each of the following would influence the price of bonds and interest rates (Explain your answers using supply and demand graphs):
Suppose the current equilibrium price of a quarter-pound hamburger is $5 and 10 million quarter-pound hamburgers are sold per month. After the federal government imposes a tax of $.50 per hamburger, the equilibrium price of hamburgers rises to $5.20 ..
The aluminum industry faces a private marginal cost curve PMC = Q and a market inverse-demand curve of PD = 20 – QD. However, production creates an externality with marginal damages of MD = 2. Graph the private marginal cost, the social marginal cost..
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After the first course in biology or chemistry, many decide to major in something other that the natural sciences. which of the 12 principles is at work here?
The version of Okun’s law assumes that with no change in unemployment, real GDP (RGDP) normally grows by 3 percent over a year. If RGDP last year was $12,375 and the unemployment rate fell by 1 percentage point from last year to this year, what would..
A competitive firm that is profit maximizing pays a wage. The firm has started marketing its new product.
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