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EI Paso Water Utilities (EPWU) purchases surface water for treatment and distribution to EPWU customers from EI Paso Country Water Improvement District during the irrigation season. A new contract between the two entities resulted in a reduction in future price increases in the cost of the water from 8% per year to 4% per year the next 20 years. If the cost of water next year (which is year 1 of the new contract) will be $260 per acre-foot, what is the person worth of the savings ( in $/acre-ft) to the utility between the old and the new contracts? Let the interest rate equal 10% per year.
Suppose that Shelly's preferences for consumption and leisure can be expressed as u(c ,l)=(c-300) (l-60). Calculate her utility, u0 , if she consumes c = $1000 and enjoys l = 110 hours of leisure per week. Evaluate her marginal utilities of consumpti..
On average your client recieves 1%in annual simple interest in the foreign country. Explain to the client how the move would benefit savings.
What three factors determine whether two economies with separate fiscal and monetary authorities should form a currency union.
Thomas has income of $1500 today and $1000 tomorrow. He can lend and borrow at an interest rate of 10%. There is 10% inhalation. His preferences for inter temporal consumption are represented by the following utility function U (c1 ; c2 ) = c1 + c2 ...
According to Purchasing Power Parity, if a country has a relatively high inflation rate then its currency should be depreciating. Explain.
A firm sells its product in a perfectly competitive market where other firms charge a price of $80 per unit. The firm's total costs are C(Q)=40+8Q+2Q2. how much output should the firm produce in the short run? what price should the firm charge in the..
Why are local tax bases more elastic than national tax bases? Give an example, and explain other possibilities that may make the tax base more elastic.
If income elasticity of demand is 2.12, it means that quantity demanded will __________ by 2.12 percent for every __________ percent __________ in income.
Given the following information about the economy of Pakistan, calculate Pakistan\'s GDP. Note that the currency of Pakistan is the Rupee. Assume that the values are all current and no conversions need to be made.
The cash flow associated with a stripper oil well is expected to be $3,000 in month one, $2,950 in month two, and amounts decreasing by $50 each month through year five. What is the cash flow in the last month of year 5? At an interest rate of 1% per..
Use the Keynesian-cross model to illustrate graphically the impact of an increase in taxes on the equilibrium level of income.
From one year to the next nominal GDP rises and the GDP deflator falls. Which of the following exclusions from GDP suggests that GDP is underestimating our material well-being? Full employment is typically associated with:
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