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1. Consider two projects. The first project pays benefits of $90 today and nothing else. The second project pays nothing today, nothing one year from now, but $100 two years from now. Which project would be preferred if the discount rate were 0%? What if the rate increased to 10%? 2. Suppose that the original before-tax demand curve is P = 98-2Qd and that supply is P = 2+2Qs. Now suppose a $3 unit tax is imposed on consumers.a. Use supply and demand diagrams to show the effect of a $3-unit tax imposed on the demand side. b. What is the before-tax equilibrium price and quantity?c. What is the after-tax equilibrium quantity?d. Calculate the economic incidence incurred by producers and the economic incidence incurred by consumers.e. How much tax revenue is raised?
why social faces inflation and unemployment?
Macroeconomics We have explained several concepts and Macroeconomic Aggregates which form the basic terminology of macroeconomic analysis. Like other empirical sciences, econom
If the MPPL/ MPPK in the production of a good are less than w/r, why is the produce not in producer equilibrium? Explain how, with no change in budget size for the firm and with th
Two people are engaged in a joint project. If each person i puts in the effort x i , the outcome of the project is worth f ( x 1, x 2). Each person's effort level x i is a
There are three industrial firms in a quaint town of South Orange where the municipal government wants to reduce pollution to 120 units from uncontrolled level of 210 units. Three
The problem with the Keynesian model We can classify two problems with the Keynesian model as developed so far: 1. Π is exogenous. Although inflation may temporarily deviate
I''m trying to figure out what the effect would be on LM or IS curve, and additionally the interest rate and income if (a) the transactional demand for money increases, (b) the liq
The Stop decay company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decay fighter, redu
1. Calculate the duration of a par value bond with a coupon rate of 8% and a remaining time to maturity of 5 years. 2. On September 26, the spot price of gold was $320 per ounc
Determination of all endogenous variables We can explain how all the endogenous variables are determined in below figure: Figure: The Keynesian model with the Phillips c
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