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A study finds that leaf blowers make too much noise, so the government imposes a $10 tax on the sale of every unit to correct for the social cost of the noise pollution. The tax completely internalizes the externality. Before the corrective tax, Blown Away Manufacturing regularly sold blowers for $100. After the tax is in place, the consumer price for leaf blowers rises to $105. a. Describe the impact of the tax on the number of leaf blowers sold. b. What is the socially optimal price to the consumer? c. What is the private market price? d. What net price is Blown Away receiving after it pays the tax?
Illustrate what are influence of following changes in policies on private saving and national saving. New policy: Increase in government purchases by $100 and taxes by $80. (MPC=0.7) Estimate amount of changes.
If lots of people want Euros also Euros are in short supply also a few people want Japanese yen also yen are in plentiful supply the euro is likely to.
Illustrate what would neoclassical economists and new dissidents have to say about former Bush Administration's efforts to push forth a Free Trade of Americas with our South American, Central American and North American neighbours.
Think of one situation in which the Government is actively involved with the purpose of changing an outcome in the appropriate market. Do you agree that the Government should be involved? Why or why not?
question 1 one tradeoff society faces is between efficiency and equality. elaborate each term with suitable examples.
What is the "purchasing power parity" theory of exchange rates? If the price of a representative bundle of tradable goods is currently $5000 in the U.S. and 550000 yen in Japan, is the $ undervalued or overvalued when the exchange rate is 90 yen per ..
At the end of a projects life, an asset will be disposed. The projects cash flow statement will show a small gains tax credit (positive cash flow). Which of these statements must be true?
According to the political business cycle theory, if the Fed wanted to see a President re-elected, prior to the election it might.
A friend borrows 500$, agreeing to pay back the loan principal plus 75$ interest one month later. One year goes by and he doesn’t pay. Exactly one year later you ask him to pay the loan immediately plus an interest with monthly compounding.
Consider decision making process used by consumers as they budget their money to maximize use of their resources.
In December 1994 a man in Ohio decided to deposit all of the 8 million pennies he’d been saving for nearly 65 years. (His deposit weighed over 48,000 pounds!) With a reserve requirement of 12.5 percent, what will be the cumulative change for the bank..
Phil realized a total return of 13.2 percent which is less than his expected return of 14.4 percent. What is the amount of his unexpected return? A portfolio is comprised of two stocks. Stock A comprises 65 percent of the portfolio and has a beta of ..
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