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Suppose an economy of two firms and two consumers. The two firms pollute. Firm 1 has a marginal savings function of MS1(e) = 5-e where e is the quantity of emissions from the firm. Firm 2 has a marginal savings function of MS2(e) = 8-2e. Each of the two consumers has a marginal damage MD(e) = e, where e in this case is the total amount of emissions the consumer is exposed to.
1. Graph the firm-level and aggregate marginal savings functions
2. Graph the aggregate demand function
3. What is the optimal level of pollution, the appropriate Pigouvian fee, and the emissions from each firm?
Explain how this transaction would be recorded in your firm's financial statements. Additionally, your hospital has experienced negative levels of net income for the last five years. The total amount of accumulated deficits is $5 million
Management at the Johnston Corporation estimates a demand function for its lawnmower line to be:Explain the coefficients of each explanatory variable.
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How foreign direct investment influences the wages
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Derive the FOC and SOC conditions of profit maximization for this firm. Show that SOC is satisfied (impose necessary conditions). Which plant will have a greater increase in output? Please explain why.
Assignment on Supply, Demand & Taxes, Supply, Demand, and Taxes, The market for tennis shoes exhibits the following supply and demand schedules:
What key economic concepts underlie the employ of discount coupons by businesses?
Dsecribe a complete business cycle (trough, peak, expansion, recession), focusing on what happens to output, investment, employment in each phase.
Using two graphs, show consumer surplus before and after government intervention.
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