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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 the U.S. government were willing to convert dollars into gold at a fixed price, then dollars would be a. fiat money. b. commodity money. c. bank money. d. both fiat and
What causes a supply curve to shift? a. Changes into Input Prices An input is a good which is used to generate another good. b. Changes into Technology c. Chang
Using an aggregate demand and supply diagram, explain how each of the following scenarios affects the equilibrium price level and aggregate output a/Consumers expect a recession b/
Comparative if Person can make 15 wristbands and hour and 3 potholders. What is the comparative advantage? If same person works 20 hours a week graph the possible combinations sh
Q. Illustrate diffrent types of money? In most countries, one may identify two 'types of money': Bank deposits Currency and coins The total value of all th
Q. How much money can banks create? Does that mean that banks can create an unlimited amount of money? No the answer is no - it would require them to lend an unlimited amount o
Why does a production possibilities frontier with increasing opportunity costs have a bowed-out shape? The curve is bowed-out because some resources are better suited for the
What are the potential disadvantages of growth? The potential disadvantages of growth are as follows: • Raised pollution, • Depletion of non renewable natural resources
(Consumer Price Index)Given the following data, what was the value of the consumer price index in the base year? Calculate the annual rate of consumer price inflation in 2013 in ea
Manufacturer is considering purchasing equipment, which will have the following financial effects: Year Disbursements Receipts 0 $4400 $0 1 660 880 2 660 1980 3 440 2420 4 220 1760
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