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In the late 1990s, car leasing was very popular in the United States. A customer would lease a car from the manufacturer for a set term, usually two years, and then have the option of keeping the car. If the customer decided to keep the car, the customer would pay a price to the manufacturer, the “residual value,” computed as 60% of the new car price. The manufacturer would then sell the returned cars at auction. In 1999, the manufacturer lost an average of $480 on each returned car (the auction price was, on average, $480 less than the residual value). A. Why was the manufacturer losing money on this program? B. What should the manufacturer do to stop losing money?
With the help of a diagram show how home will benefit from trade according to the Ricardian Model. In your diagram, clearly mark the point of production and consumption before and after trade; mark the amount of import or export.
Assume an increase in England’s economic growth. Holding everything else constant, we can expect:
Assume a hypothetical economy in which the velocity is constant at 2 and real GDP is always at a constant potential of $4,000. Suppose the money supply is $1,000 in the first year, $1,100 in the second year, $1,200 in the third year, and $1,300 in th..
Consider a public project to build a bridge. The government is deciding whether to undertake it or not. Let k = 1 if the bridge is built and k = 0 if the bridge is not built. The cost of building the bridge is C = 97. Assume the government knows θ. F..
How would you evaluate monetary policy and fiscal policy today? Is monetary policy contradictory with fiscal policy? Why or Why not? Support your analysis with examples.
If the farmer rented her land from a landowner,would she have the same incentives to control soil erosion. What would the landowner have an incentive to control erosion.
sketch a production indifference curve indicating that CCC can produce no more than 1,000 containers with this expenditure.
Consider an individual who faces a gamble over two outcomes, In the first outcome he maintains the wealth of w1, and in the second outcome he faces a loss of wealth and is left with a final amount of w2.
Economic data is a very broad concept. It can include discrete preference relation data-sets as well as extensive time series data. But it is important that theories are tested against data, and the earlier this happens in the development of an econo..
Assume an open, mixed economy. That is, foreign trade is part of the economy, and the economy includes both a public (government) and a private (consumers and businesses) sector. Will these actions by Congress expand or contract the economy or are th..
Graphically reflect the impact of changes in the non-income determinants of consumption spending on the consumption function.
Firms can have: Accounting profits and economic losses, Accounting profits and economic profits, Accounting losses and economic losses, Accounting losses and economic profits.
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