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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?
If there is an increase in the popularity of video games and more companies making video games, then the following is true? A) Sales of the games will be uncertain. B) Price will g
Q. Explain IS curve with inflation? The IS curve with inflation We can draw IS curve for a given value of π e . As earlier explained, IS curve isn't affected by changes
explain and illustrate how the Lm curve is derived.
Consider an economy that produces only three types of fruit: apples, oranges & bananas. In the base year the production & price data are as follows: Fruit
Consider an economy with the following characteristics: i. The price-level is fixed ii. The economy is closed (Exports - Imports = 0) iii. Government spending (G) and Inve
Four different measures of GDP Using circular flow model we see that there are 4 equivalent ways of measuring GDP: Using the definition: market value of all finished goo
What does a shift in the demand to the right mean? Why does the demand curve shift?
Discuss the problems of measuring productivity in actual work situations. Also how productivity might be measured for each of the following industries? Finance and insurance (examp
To the right is a production possibilities table for consumer goods (automobiles) and capital goods (forklifts): a. Show these data graphically. Upon what specific assumptions is t
Using supply and demand diagrams, plus explanations of why you have drawn the supply and demand curves the way you have, explain why, in most cases. a) Garbage collectors earn mor
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