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Consider the basic Rothschild-Stiglitz model with asymmetric information and two types on consumers. A policymaker who has taken this class suggests that is might be beneficial to impose a flat tax on healthy people and distribute the tax revenue to sick people, providing partial insurance to people.
a. Since the tax will only offer partial insurance, there will still be a private competitive market for additional insurance. Will a separating equilibrium be possible in the insurance market if this tax is implemented? Draw a diagram to justify you answer.
b. After the tax is implemented a recession hits and a new policymaker decides to make up for a tax revenue shortfall by expanding the tax to include sick people as well as healthy people. Will a separating equilibrium be possible in the insurance market under this policy?
How is purchasing power parity calculated and why is it superior to the exchange rate in making comparisons between per capita income levels in different countries. Why is the international US dollar used in making comparisons? How did Maddison estim..
Under what situation would Gore be better off giving Bush a head start on putting mutually his presidential ticket.
What must a person who is claiming they were harassed in the workplace allege in order to first state a case with the EEOC for each of the following types of harassment?” Sexual harassment-quid pro quo.
Illustrate the effects of the following on the money market diagram. Show what happens to the interest rate in each case.
About the Utility is..
Supposre that there are equal numbers of each customer type, and that the MC of the iphone is $100."
A large company in the communication and publishing industry has quantified the relationship between the price of one of its products and the demand for this product as Price = 150- 0.01 x Demand for an annual printing of this particular product.
Suppose that annual income from a rental property is expected to start at $1,350 per year and decrease at a uniform amount of $55 each year after the first year for the 12-year expected life of the property. The investment cost is $8,200, and i is 9%..
Using production theory as a basis, is the CEO correct in his assumption that lazy workers or ineffective supervisors are to blame for the decline in productivity? What other explanations might be possible?
Assume a bank purchases a newly issued mortgage backed security (MBS) for $1,000. After the year, the value of the MBS has decreased to $750:
q.a. for jalapeno peppers draw a graph of market. be sure to label everything.b. draw a new graph that shows what
Compute the optimal pricing scheme of the iphone, Assume which there are equal numbers of every customer type.
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