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The short-run supply of a certain crop is perfectly inelastic, because it has already been harvested and no more of it can be grown until the next growing season. In order to raise the price received by farmers, the government orders the destruction of a percentage of the harvest. Does this action result in a deadweight loss? Why or why not? Assume that the cost of distributing the crop to consumers is zero.
The below diagram demonstrates how all the variables are determined in classical model: Figure: Determination of all the variables in the classical model a) Start at
Question 3 (44 marks) Please note that this question requires substantial research. A summary from the text book is not sufficient. To score well you will have to consult several a
Assess the impact of transaction costs as they apply to the Coase Theorem. Evaluate how government assignment of property rights impacts free market exchanges.
Compute the mean and variance of the following discrete probability distribution. Where X=2, and P(x)=.5. Where X=8 and P(X) .3. Where X=10 and P(X) =.2.
note on Marris growth maximizing model
The Pigou effect: A) suggests that as prices fall and real money balances rise, consumers should feel less wealthy and spend less. B) suggests that as prices fall and real mo
Suppose you buy call options on Microsoft stock. Each option costs $2 and has the strike price of $40 and the expiration date July 1. Discuss whether you would exercise the options
Q. Define Nominal wages? The nominal wage is wage per unit of time in the currency used in the country- what we usually just call wage. When we mention wage in macroeconomics w
is there a graph for says law?
An end-of-aisle price promotion changes the price elasticity of a good from -2 to -3. If the normal price is $10, what should the promotional price be?
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