What would be the full economic price of this legislation

Assignment Help Business Economics

Reference no: EM131236878

From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that banks impose on noncustomers, who make $14 million in withdrawals from other banks’ ATM machines. On average, noncustomers earn a wage of $24 per hour and pay ATM fees of $3.25 per transaction. It is estimated that banks would be willing to maintain services for 6 million transactions at $1.00 per transaction, while noncustomers would attempt to conduct 22 million transactions at that price. Estimates suggest that, for every 1 million gap between the desired and available transactions, a typical consumer will have to spend an extra minute traveling to another machine to withdraw cash.

Based on this information, what would be the nonpecuniary cost of legislation that would place a $1.00 cap on the fees banks can charge for noncustomer transactions?

Instructions: Round your answer to the nearest penny (2 decimal places).

What would be the full economic price of this legislation?

Reference no: EM131236878

Questions Cloud

Assess how different economic environments : Assess how different economic environments, such as boom and bustcycles, affect markets both individually and collectively. In other words, consider how economic growth or scarcity affects individual markets and how the economic environment for one m..

Best any other goods are worth less than dollar : Janice really likes potatoes. At best any other goods are worth less than a dollar to her, potatoes cost $1.00 per pound, and she has $5.00 that she could possibly spend on potatoes or other items. Suppose she feels that the first pound of potatoes i..

The own price elasticity of demand for product : You are the manager of a firm that receives revenues of $40,000 per year from product X and $90,000 per year from product Y. The own price elasticity of demand for product X is -1.5, and the cross-price elasticity of demand between product Y and X is..

The coconut oil demand function : The coconut oil demand function is Q=1,200-9.5PC+16.2Pp+0.2M where Q is the quantity of coconut oil demanded in thousands of metric tons per year, PC is the price of coconut oil in cents per pound, Pp is the price of palm oil in cents per pound, and ..

What would be the full economic price of this legislation : From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that banks impose on noncustomers, who make $14 million in withdrawals from other banks’ ATM machines. What would be the f..

Has the economy experienced inflation or deflation : Suppose that expectations concerning the future state of the economy, held by people in the economy’s private sector, become more pessimistic. determine in which direction the affected curve(s) shifts. Is the Unemployment Rate now greater than, less ..

Price of gold increased on average by approximately : Based on the regression equation, the price of gold increased on average by approximately $___ per ounce for a $500 billion increase in the monetary base (round to the nearest dollar). regression equation $/oz gold=207+.05 monetary base

Attempted to create a set of social accounts : Many economists have attempted to create a set of social accounts that would come closer to measuring the economic well-being of the society than does GDP. What modifications of the current approach would you recommend to them?

Change in order to change the consumption of good : From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that banks impose on noncustomers, who make $14 million in withdrawals from other banks’ ATM machines. What would be the f..

User Account

All Pages