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Q1. Which types of inefficiency described in chapter 10 do you think is most economically significant in the country that you know best? Elucidate why and give an example?
Q2. Disability payments replace a higher fraction of the wages of low-wage workers than of high-wage workers. Overall, average disability payments rise with the average wage. Assume wages of low-skilled workers fell sharply relative to high-wage workers. Explain how would this affect the incentives to enter disability for low-wage workers? Elucidate your answer.
She is now considering raising her prices by 20 percent to offset the increase in her monthly rent.
Trace out exactly where this 100 increase in income goes in the second round and compare to our simpler treatment with a closed economy and lump sum taxes.
George and John, stranded on an island, use clamshells for money. Last year George caught 300 fish and 5 wild boars. John grew 200 bunches of bananas.
Pharmaceutical drugs have an inelastic demand, as well as computers have an elastic demand.
Which of the following possibilities is consistent with the property of diminishing marginal product.
What is the output of each firm if they collude to produce the monopoly output. What profit does each firm earn with such collusion.
Microsoft emerges to have a monopoly with over 90% of the personal Calculator operating market. Why then would it not be charging a monopoly cost.
By what percentage do the total assets decline by bank. By what percentage does the bank's capital decline. Illustrate which change is larger.
The fact that a percentage of the interest income paid by one corporation is excluded from taxable income has encouraged firms to use more debt financing relative to equity financing.
There are three types of plant: coal, natural gas, and hydroelectric. The three types of plants face the costs appearing in the table above.
Roma was a schoolteacher and earned $40,000. But she enjoys creating cartoons, so at the beginning of 2003, Roma quit teaching.
How might oligopolistic increase total revenue without changing prices.
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