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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?
Raising chickens requires several types of feed, such as corn and soy meal. Consider a farm in the former Soviet Union. Try to describe how decisions on the number of chickens to b
Fixed versus floating exchange rates: To begin with, we will briefly review the balance of payments (BOP) table of a nation that you studied in the course on international eco
How can a country maintain equilibrium GDP with foreign trade?
The demand equation for champagne is given by P = 10 - Q. The supply schedule for champagne is given by P = Q. Note that P denotes price per bottle in dollars, and Q is quantity me
If the price of DVD players decreases, we can expect that the demand for DVDs will: a. increase. b. be unaffected. c. shift left. d. Decrease
When Sonoma Vineyards reduces the price of its Cabernet Sauvignon from $15 a bottle to $12 a bottle, the result is an increase in a. the demand for this wine b. the supply of
Control: In apples molded by Penicillium expansum, most of the patulin is confined to the region of damaged tissue and simply removing the lesions reduces the toxin by 90%, but i
What are the instruments of monetary policies
Design a hypothetical ideal randomized controlled experiment to study the effects on highway traffic deaths of wearing seat belts. Suggest some impediments to implementing this exp
when the income velocity of circulation (V) rises, why does the economy''s total output must rise?
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