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

Examine essential elements of modern democratic societies, Question 1: ...

Question 1: Examine the essential elements of modern democratic societies. Question 2: State the various ways in which the participation of people is achieved in a demo

Privatisation, critically examine the statement that privatization can alwa...

critically examine the statement that privatization can always decentralize economic power

Welfare and subsidies, what are the costs and consequences of providing the...

what are the costs and consequences of providing the subsidies and welfare?

Journal of liberalism, how to make summarize the basic tenets of the argume...

how to make summarize the basic tenets of the arguments in the case of Mark Davis 2010 of journal of liberty?

User charges in the environmental economics, Normal 0 false f...

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

Lower tax bracket., Jenna's boss has decided to pay her a one-time bonus o...

Jenna's boss has decided to pay her a one-time bonus of $5,000. She decides to save the money until she retires, 4 years from now. She contemplates two savings options. Option A is

International trade and finance, explain how under the WTO differential tre...

explain how under the WTO differential treatment in reverse is different from the special and differential treatment

Pollution Abatement Options, Normal 0 false false false ...

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

Model of industry protection of grossman and helpman, Consider the model of...

Consider the model of industry protection of Grossman and Helpman. There are two industries A and B, each producing good X and Y respectively. All other things being equal, the dem

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