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Explain how moral hazard, asymmetric information, and adverse selection molded tort law regarding compensation for injuries to slaves, livestock, and free passengers caused by, or occurring on, common carriers (steamboats and railroads). Explain why the outcome was, or was not, economically efficient.
A market in which there are neither external benefits nor external costs is: According to the special-interest theory of government, government officials and policymakers: Scientific research is subsidized by the government because. The forces of sup..
Prepare Cannon Company's statement of cash flows for the year ending December 31, 2015 using the indirect method.Explain how the indirect statement of cash flows that you prepared would differ under IFRS rules. Assume this is a non financial entity.
Elements of fiscal policy that move the budget toward surplus as the economy expands and toward deficit as it contracts are called ________.
With the aid of supply and demand diagrams, explain how and why each of the following is likely to affect the price and quantity in the market for Compact Discs (CDs). A technical break-through reduces the cost of producing CDs.
structural unemployment of 2 percent, seasonal unemployment of 0.5 percent and cyclical unemployment of 2 percent, illustrate what is natural rate of unemployment.
Suppose that the long-run world demand and supply elasticities of crude oil are -0.906 and 0.515, respectively. The current long-run equilibrium price is $30 per barrel and the equilibrium quantity is 16.88 billion barrels per year. Next, suppose the..
for each bundle that the consumer chooses, show the indifference curve that goes through that bundle. Make sure to label your graph carefully and accurately.
For each of the following scenarios, say whether pooling or diversification is a more promising risk-mitigation strategy.
Suppose that the US current account deficit must be reduced. Explain in terms of CA ≈ (S – I) + (T – G) what must be done to reduce the current account deficit. Why will this be difficult? (Hint: It may be helpful to think about the household that ha..
A change in the discount rate shifts the supply of reserves. Friedman's theory of money demand is more complex than Keynes's.
When the Euro was introduced in 1999, the exchange rate was $1.19 per euro. In March 2011, the exchange rate was $1.42 per euro. Was this change in the dollar-euro exchange rate good news or bad news for U.S. firms exporting goods and services to Eur..
An island economy produces only two goods, apples and bananas. There are five people (A,B, C, D, and E) living on the island with these preferences: For each of these five individuals, construct several representative indifference curves with apples ..
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