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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?
One problem in using exchange rate when comparing GDP per capital between countries is that is fluctuates a lot. A way of avoiding dependence on exchange rate is to use purchasing
Think of a business firm you recently visited (such as Walmart, Home Depot, Red Lobster, Barnes & Noble, McDonald's, etc.). What motivated the producers of all the individual produ
Financing of Fiscal Deficit: Since the size of balanced budget of the multiplier is small, it is not for all time possible to get the needed demand expansion by raising the exp
market structurs
One constraint in our economy is time. As a society, we make choices about the allocation of time between work and other pursuits. In the US, most workers are eligible for overtime
dynamic multipier
There are very examples of perfect competition. Yet in the study of industrial organization, significant discussion is focused on this type of market. Explain why.
If you were a restaurant owner and you knew that the demand for your restaurant was elastic, how would you feel about a sales tax on restaurant food? Explain.
An electronic chip is to be implanted in the body. During in vitro (in the lab) testing it is observed that the chip will dissolve over time if exposed to liquid with similar pH to
Given the following data for StewieLand, a closed economy in 2012… real gdp = $20,000 public savings = $1,000 consumption = $11,000 tax revenue collected = $4,000 Solve for
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