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1: Explain how an economist would determine the optimal level of a pollution tax. What is the major uncertainty in using a pollution tax?
2: What are some particular problems with stock pollutants? Why might a reduction in emissions levels of a stock pollutant be insufficient in reducing the negative effects of the pollutant?
Assume a good where its equilibrium price is 40 and its equilibrium quantity is 3.0 units. Compute the supply surplus when price is 60. Take into consideration that the elasticity of supply is 1 and the elasticity of demand (-1)
A monopoly is considering selling several units of a homogeneous product as a single package. A typical consumer’s demand for the product is Qd = 80 – .5P, and the marginal cost of production is $100. a. Determine the optimal number of units to put i..
Suppose that the matching function is given by: M = em(Q, A) = eQ^(0.7)A^(0.3) Express pc and pf as functions of e and labor market tightness j. Suppose that z = 1, b = 0.4, e = 0.9 and k = 0.24. Suppose that w = 0.75 Find the unemployment rate in th..
Consumer A values good 1 at $4,500 and good 2 at $1,500. Consumer B values good 1 at $5,000 and good 2 at $1,000. Costs are zero. Suppose the monopolist only sold the goods separately. What prices will the monopolist charge for good 1 to maximize rev..
Explain what is the maximum amount of new loans that this bank can make. Show in column 1 how the bank's balance sheet will appear after the bank has lent this additional amount.
Monetary policy is limited in its impact when There could be more than one answer.
Use the GG-LL diagram to show how an increase in the size and frequency of unexpected shifts in a country's money demand function affects the level of economic integration with a currency area at which the country will wish to join.
Describe the four types of regional trading agreements discussed in class and show how each type creates a greater and greater level of economic integration.
An economist, has the following information about Lais Island, a closed economy, for the year 1820: Y = 10,000 C = 6,000 T = 1,500 G = 1,700 The economist also estimates that the investment function is: I = 3,300 – 100 r Where, r is Lais Island real ..
The following table shows bottled water demand and supply for a particular city: Draw supply and demand curve. Identify equilibrium price and quantity. Identify Consumer Market Surplus and Producer Market Surplus. Using your graph, calculate the doll..
You are the owner of a local Honda dealership. Unlike other dealerships in the area, you take pride in your “No Haggle” sales policy. Last year, your dealership earned record profits of $1.5 million. In your market, you compete against two other deal..
Suppose the spot Yuan\dollar exchange rate is 6.69. Sue a Chinese national, has 10,000 Yuan that she wants to invest in a U.S. asset that promises an annual interest of 7 percent. If the expected exchange rate (Yuan/dollar) after a year is 7.3, how m..
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