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Suppose that a small family farm sold its output for $100,000 in a given year. The family spent $25,000 on fuel; $40,000 on seed, fertilizer, and pesticides; and $25,000 on equipment, including maintenance. The family members could have earned $20,000 working at other occupations.
What is the family's accounting cost? What is the family's economic cost? Could the family's economic cost ever exceed its accounting cost? Why or why not?
If the project has a 10-year life and they think they can sell the packer for $105,000 at the end of the project, what is the net present worth of this project
Alternative B is for reforming the disability system is to maintain the old benefit levels (for those who receive them) but allow workers to earn up to $300 a month and still keep their benefits. Those who earn over $300 per month would lose all DI b..
Why are usage-based insurance rates lower than at-rate insurance fees? Give two separate reasons and explain.
Suppose the economy starts with a capital stock at time t = 0 equal to 1 unit. Write down the values of gross investment, net investment, capital, consumption, and output observed during the subsequent 10 periods. Suppose that at the beginning of som..
What is a recessionary gap? What are effects of this gap on the price level, real output, and unemployment? Explain
Assume production is described by Y = BK^alpha X^beta E^gamma L^1-alpha - beta - gamma, where K is capital, X is land, and E is energy. Capital evolves according to a typical Solow model, K^dot = sY - delta K. Land does not grow, X^dot = 0. Energy ev..
Fiscal policy becomes more effective than monetary policy in a liquidity trap. An increase in the corporate tax rate undermines the effectiveness of monetary policy in a closed economy. Discuss the events that drew the United States into World War I.
Joe and Rebecca are small-town ready-mix concrete duopolists. The market demand function is Qd = 10,000 – 100P, where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $25 per cubic yar..
The demand for a monopoly's output is p = 100 - Q. The firm's production function is Q = 2L. What is the firm's demand function for labor? Compare and contrast the models of organizational behavior that are especially suited for more affluent nations..
Do you think the government, using both fiscal policy and monetary policy, faces any trade-offs in trying to control for inflation vs. unemployment. What do you believe is more of a problem towards long-term economic growth: persistent inflation or u..
What is the profit-maximizing unit price PoolVac should charge for Sting Ray - Evaluate the statistical significance of the three estimated parameters using a significance level of 5 percent. Be sure to comment on the algebraic signs of the three p..
we dot know whether the total quantity of Internet ads will increase or decrease. Is the students analysis correct? Illustrate your answer with a demand and supply graph.
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