Capital accounting system, Public Economics

Assignment Help:

(1) The federal government is considering selling tracts of federally owned land to private developers and using the revenues to provide aid to victims of an earthquake in a foreign country. How would this policy affect the levels of federal revenues, expenditures, and deficits under a cash accounting system? What would be different under a capital accounting system?

(2)  A government is considering paving a highway with a newly developed "wear-proof" material. Paving the highway would cost $2 billion today, but it would save $300 million in maintenance costs for each of the next 10 years. Use the concept of present value in maintenance costs for each of the next 10 years. Use the concept of present value to determine whether the project is worth undertaking if the government can borrow at an interest rate of 5 %. Is it worth it if the interest rate is 0 %? 10 % ? A politician says to you, " I don't care what the interest rate is. The project is clearly a good investment: it more than pays for itself in only 7 years, and all the rest is money in the bank." What's wrong with this argument and why does the interest rate matter?

(3) Suppose that demand for a product is Q-1200- 4P and supply is Q= -200 +2P? Furthermore, suppose that the marginal external damage of this product is $8 per unit. How many more units of this product will the free market produce than is socially optimal? Calculate the deadweight loss associated with the externality.


Related Discussions:- Capital accounting system

Volume of production, what is volume of production and the factors influenc...

what is volume of production and the factors influencing them

Pigovian approach, PIGOVIAN APPROACH   Pigou assumed  that  the aim  of...

PIGOVIAN APPROACH   Pigou assumed  that  the aim  of  social policy is  to  'promote welfare'. But  in order to simplifL  this, he chose to restrict the range of his inquiry to

Price and extraction path over time, Normal 0 false false f...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Comment on each of the following statements, Unions tie the hands of manage...

Unions tie the hands of management and inhibit efficient decision making

Coase's bargaining solution, Normal 0 false false false ...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Factors for evaluating a policy instrument, Normal 0 false fa...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Economics, three basic economics difference between them and definations

three basic economics difference between them and definations

How to prevent bulling, what could I write for pharigraph 2 on why a bully ...

what could I write for pharigraph 2 on why a bully bullies

What is corporate communication, Corporate communication can be anything fr...

Corporate communication can be anything from how a corporation functions internally/externally, to what is making its communications operate like call center equipment, etc.

Discuss various factors that influenced the agenda setting i, Explain the s...

Explain the stages and various coordination mechanisms involved in policy processes. Discuss various factors that influenced the agenda setting in policy processes

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd