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A firm produces new pharmaceutical drugs using computers and scientists. Computers cost $10 and wages for scientists are $10. There is also a givernment program attempting to boost employment of scientists which will pay 50% of a wage for any scientist hired, up to a maximum of 2 scientists.
1) Draw an isocost line for cost=10
2) Draw an isocost line for cost=20
Explain how might this allocation under allocation get resolved via the means suggested by the coase theorem.
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Describe the effect of such clauses on both the government, and other customers, noting, inter alia, the effect on the selling firmâ.
Suppose that a car dealership wishes to see if efficiency wages will help improve its salespeople's productivity. Currently, each salesperson sells an average of one car per day while being paid $20 per hour for an eight-hour day.
Illustrate two policies could you use to reduce the total amount of emissions. Explain how would you decide what was the best level of emission reduction.
Consider the case in which an investor holds a bond for a period of time longer than the duration of the bond, that is, longer than the original investment horizon.
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