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After a competitive bidding process, Firm G wins a contract to collect and dispose of Firm H's hazardous waste for $1,000 per year. Firm G's labor costs are $200 per year, and because of the unique nature of the waste, it has to invest $8,000 in a special made-to-order furnace-money that it could otherwise have put in the bank at 10 percent interest. Thus, the annualized cost of the investment is $800. So specialized is the furnace that, were the contract canceled, Firm G could only scrap it and receive $1,500 for the metal. a) By how much could Firm H threaten to cut the fee if subsequently some dispute arises over the terms of the contract, or if the contract comes up for renewal?
b) By how much could Firm H threaten to cut the fee if the furnace can be adjusted, at a cost of $3,000, to handle the waste of Firm J, which is willing to pay $700 per year for that service?
Fiscal Policy An Increase in Government Spending: Figure 1 Let us examine how an increase in government spending affects the interest rate and the level of income.
Estimate the cost of expanding a planned new clinic by 20,000ft^2. The appropriate capacity exponent is 0.66, and the budget estimate for 200,000ft^2 was $15 million.
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Compare and contrast federal government expenditures, state and local government expenditures, and financing government expenditures. Suggest a total of three actions that should b
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In a group environment, should leaders be assigned at the beginning of a project or should leaders emerge as the group is working on the project? Outline the positives and negative
Illustrate the about term the open economy in short. The Open Economy: a. A closed economy is an economy which does not trade goods-services as well as assets. b. The Uni
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