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The long-run supply curve for a good is a horizontal line at a price $3 per unit of the good. The demand curve for the good is QD = 50-2P.
(a) What is the equilibrium output of the good?
(b) A $1 excise tax is imposed on the good. What will be the long-run effect on the equilibrium output of the good? Explain.
(c) Shortly after the tax is imposed, a unit of the good can be purchased for $3.60. Is this the long-run equilibrium price? Explain.
What factors can contribute to unemployment and how can technology lead to greater unemployment, or is it a benefit to the economy?
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Determine what fiscal policy measure has a more direct impact to the economy, an increase in government spending or an equal decrease in taxes if consumer confidence is lower than the previous month.
Consider two firms X and Y that produce identically tasting cold drinks. In order to raise the demand for its cold drink, firm X raise its advertisement outlay.
My problem needs to be presented in paragraph form and reflected in a LP equation, showing the objective function and the constraints.
Understanding of the elasticity of demand to dispute this claim, assuming that cigarettes have a very inelastic demand. Illustrate with a graph.
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Employ an isoquant and isocost diagram and words to show how firms will respond to the decrease in the wage rate. Be sure to identify the short run scale effect and the long run substitution effect.
You do not need to provide actual numbers; rather, show on the price axis where the price would be before the externality is considered and the price after the externality is included. What problems might exist in determining this new, externality..
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