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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?
Why is GNP C+ I + G + (X- M)+ NR + NP. What is relationship between X - M and NR + NP
Let a macroeconomic model be of the following form: C = a + bY D a = 10 T = T 0 b = 4/5 G = G 0
how to solve problem of scarcity and choice
The U.S. Department of Agriculture, nass.usda.gov, publishes charts on the prices of farm products. Go to the USDA home page and select Charts and Maps and then Agricultural Prices
Examine the graph below. The mayor has placed a $2 tax on the sale of each taco sold within the city. How large is the decrease in producer surplus?
Suppose a consumer's income increases from $30,000 to $36,000. As a result, the consumer increases her purchases of compact disks (CDs) from 25 CDs to 30 CDs. What is the consumer'
Only two identical firms i = A;B, each with marginal cost MCi = 40 and no fixed cost, operate in a market with demand: Q p 1 160 2 120 3 90 4 70
Long Run Equilibrium:Graphical Analysis In the long run the natural rate of output is the level of output to which the economy will tend to adjust in the long run. This indicat
It refers to the study of feasibility of a project in terms of its total economic cost and total economic advantages. It means to compare total cost with total advantage if we
What is money has nothing to do with token We also consider that what is money has nothing to do with token or commodity itself: USD is money in United States but not in
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