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Q. this chapter analyzed welfare effects of a tax on a good. Consider now opposite policy. Assume that government subsidizes a good: For each unit of goods sold, government pays $2 to buyer. How does subsidy affect consumer surplus, producer surplus, tax revenue and total surplus? Does a subsidy lead to a deadweight loss? Elucidate.
Then make an argument for why the government may still prefer using the other approach.
Elucidate how much money should the government spend to eliminate this gap. Elucidate how much money should the government give in tax cut to eliminate this gap.
Elucidate what would you recommend as a course of action, if any. For the industry you have chosen, discuss how price moves from today to the future.
When Betsy goes to make her list for tomorrow she is upset that she didn't get everything done. In a well-written paragraph explain the economics behind her inability.
If at an interest rate of 7 percent, planned investment is $2 trillion, government spending is $3 trillion, net taxes are $2.8 trillion, and household saving is $2.2 trillion, what is the quantity of funds demanded at an interest rate of 7 percent..
Solve for the new equilibrium. Illustrate what happens to the price received by sellers, the price paid by buyers, and the quantity sold.
In an effort to provide tax relief for households while still balancing the budget, Congress votes to raise business taxes and decrease personal taxes.
Assume a central bank does not satisfy the Taylor principle. Use a graph to analyze the impact of a supply shock.
An individual likes owning cars is better. In order to own a car, an individual must have a 1:4 ratio of frames to tires.
Explain how can changes in macro environment affect industries through the microeconomics factors of demand, production, cost and profitability.
Prior to the deal, three soft drink companies sold beverages on campus; now no other soft drink company is allowed to sell its products on campus or at university events. What is the beneficiaries of this deal.
compute the marginal products associated with K, L, F. Illustrate what is American's MRTS between K and L.
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