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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?
Suppose the demand and supply for milk is described by the following equations Qd=600-100P; Qs=-150+150P Where P is the price in rand, Qd is the quantity demanded in millions of l
Explain the Real wage with example Consider following scenario. You work full time and during January 2008 you make 2000 euro after tax. A specific basket of services and good
Which of the following would indicate the beginnings of an expansion of the economy? a. Fewer new firms are started. b. Stock market prices decline c. Consumer confidence improves
In order to estimate the VAR, I have firstly to specify the data which will be analysed. As it is my aim to observe the correlations between oil prices and key macroeconomic variab
In the long run, imports will most likely be paid for with: a. Aexports. b. The sale of real and financial assets. c. the extension of credit. d. higher domestic unempl
Assume a sudden collapse in the stock exchange of an economy is expected to reduce the future profitability of the firms of the economy. Construct loanable funds market in a c
how to make project
Q. Determine the Exchange rate? Exchange rate is determined by the ratio of domestic price level to the foreign price level. If, for instance domestic prices increase by 10% wh
Explain which of the two strategies is most likely to lead to development. Empirically, it seems rather evident that export-orientation has been more successful than import-sub
An attorney supplies 40 hours of work per week when her fee is $100 per hour but supplies 60 hours of work per week when her fee rises to $120 per hour. Using the midpoint formula,
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