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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?
You have acquired a CT scanner at a cost of $750,000. You expect to perform 7,000 procedures per year over the estimated 5-year life of the scanner. Assuming no salvage value and a
Desired Aggregate Spending Desired aggregate spending refers to the volume of purchases of the currently produced goods and services that all spending units in the economy wish
How can a country maintain equilibrium GDP with foreign trade?
Suppose that the quantity theory of money holds & the velocity of money are constant at 5. Output is fixed at its full employment value of 10,000 & the price level is 2. a) Ver
What is the significance of the observations made by OECD in this case study regarding “The OECD economies are more strongly dependent on the production, distribution and use of kn
#questionAssume that an economy''s GDP Y=5000. Also assume that the government runs a deficit where tax revenue T=1000 and government expendituresG= 1500. The consumption function
1.the AD curve represents at the same time the demand for goods, money and labor in the economy 2.in the AS-AD model, higher competition among producers leads to a medium run equil
1. Suppose that the supply curve for school-teachers is LS = 20,000 + 350W, and the demand curve for schoolteachers is LD = 100,000 - 150W, where L = the number of teachers and W =
Which of the following statements BEST describes the Metzler paradox? a. Tariffs improve the imposing nation's terms of trade. b. Export subsidies hinder the imposing nation's term
Consider a hospital that produces output (Q) and has two production inputs, nurse-hours (N) and beds (B). the hospital faces input costs of W N = 15 and W B = 25. Assume the h
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