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Suppose the market for widgets can be described by the following equations:
Demand: P = 20-Q
Supply: P = Q-5
Where P is the equilibrium price in dollars per unit and Q is the quantity in thousands of units.
Suppose the government imposes a tax of $2.00 per unit to reduce widget consumption and raise government revenues. What will the equilibrium quantity be? What will the new equilibrium price be? What determines the burden of taxation? Write the general formula for the burden of taxation?
Find out the optimal weekly output and price of this firm. Find out the weekly profit from the production and sale of this product.
Explain how each of the following will affect the relative values of the dollar and the euro:
Use the IS/LM model and the IS-PC-MR model to explain what monetary policy to pursue.
A tariff is simply a tax on imports. Use our model of the excise tax (with diagram) to describe why domestic firms request that tariffs be imposed.
Discuss the advantages and/or disadvantages of distributing marketable pesticide permits to each farm operating in the watershed equal to 40% of its current level of use of that pesticide, versus simply ordering each farm to reduce pesticide use t..
Finding the short run and long run profit maximizing price - quantity and number of firms in industry.
What were some of causes of stagflation of 1973 and 1979? In what ways were these episodes of stagflation different from great depression of the 1930s?
Your company is considering expanding overseas. It is particulary interested in developing markets, and narrowed its choice down to two countries, A and B.
What is autarky price and quantity equilibrium for both home and foreign? What is the open trade price and volume under free trade.
Compute the expected value (revenue) from each project. Compute the coefficient of variation of each project, and find out which project should the company choose. Compute the variance and standard deviation of expected value from each project.
Explain how advertising can be employed to allow Tots-R-Us to keep price average above cost without encouraging entry.
Explain why a monopolist will never set a price (and produce the corresponding output) at which the demand is price-inelastic.
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