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In the early 1990’s, New Jersey and Pennsylvania both reformed their automobile insurance systems so that citizens could opt for either a less-expensive policy that did not allow people to sue if they got into accidents or a more-expensive policy that did allow people to sue if they got into accidents. In New Jersey, the default option was the less-expensive policy that did not allow suing. In Pennsylvania, the default option was the more-expensive policy that did allow suing. Given those options, which policy do you think most people in New Jersey ended up with? What about in Pennsylvania? Explain.
The American Baker’s Association reports that annual sales of bakery goods last year rose 15%, driven by a 50% increase in the demand for bran muffins. Most of the increase was attributed to a report that diets rich in bran help prevent certain types..
Use supply and demand analysis to explain price reduction of computers. What effect did price reduction have on quantity of computers demanded.
Which of the following options (alone or in combination) would you recommend that the Congress and the President pursue to reduce our projected Federal deficits and debt and why. Dramatically cut military spending. Raise taxes significantly on the we..
Toyota bonds are currently rated AA, and Ford bonds are rated BB, Suppose the price of 1,000 one year Toyota bond is 970$. What is the rate of return on the one year Toyota bond
Besides raising taxes and issuing debt, the U.S. government (Treasury Department) can also secure funds by borrowing directly from the FED. What is the potential danger of this route? What are the implications for investors and for public policy of e..
In the neoclassical growth theory, differences in per capita income are determined by differences in the
A firm in a perfectly competitive market
Frank is a single-father with one child. The cost of child-care is equivalent to $150 per day. When Frank works, he receives an hourly wage of $20. In addition he has $150 of non-labor income per day. He sleeps 8 hours a day. Given these constraints,..
The higher a country's tax rates, the more likely that country will be:
If velocity ?(V) and aggregate output ?(Y) remain constant at $4 and $1,000 billion?, ?respectively, what happens to the price level ?(P) if the money supply? (M) declines from $425 billion to $350 billion?? Originally, what is the price level?
Illustrate why does the GDP deflator give a different rate of inflation than does the CPI. Illustrate what is the difference between a medium of exchange and a store of value.
Consider the EOQ model with fixed lead time L > 0. Show that the average amount of inventory on order is equal to the lead-time demand.
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