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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?
The city of Johnstown decides to build a new stadium to attract a basketball team from the city of Rosendale. One economic advisor suggests that the stadium should be fi
The following is the information from the national income accounts for a hypothetical country: GDP Rs. 6000.00 Gross Investment Rs. 800.00 Net Investment Rs. 200.00 Consumption Rs.
how does government regulate externalies
A sudden decrease in the growth rate of GDP will cause a change in: A. planned investment spending. B. unplanned investment spending. C. both planned and unplanned investment spend
how can the central bank influence the size of the multiplier
The following Table B presents the 2010 population, employment, and unemployment data among working age persons for several countries. a. Calculate the number of people in the lab
Discuss whether high indirect taxes are best way to discourage smoking
There is a joke among economists that children are an "inferior good." In many countries there appears to be a negative relationship between income and the number children in a hou
Determine the example of Currency inside banks is not money An example may also illustrate this important fact: Eric has 100 euro - this amount is obviously part of the
examine keynesian theory of un employment
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