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(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.
Your organisation has tasked your to reduce the rate of a particular type of incident or particular type of high risk hazards which is commonly occurring. Your task requires you to
Problem 1: i) According to you the Central Electricity Board in Mauritius operates in which type of market structure? Justify your answer. ii) Compare and contrast a perfe
Rules concerning disclosure of information and accounting change behaviour but only be drawing attention to certain facts. In the area of environment, Health, epidemics, and other
The coordination problem relates us to not only the levels of activities like research and developments (R&D) and investments but also to the behaviour of institutions that charact
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One shortcoming of neoclassical welfare economics is that it does not take into account the institutional structure of collective decision making. To draw normative conclusions abo
principles of multi unit finance
Types of production function
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