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In 2010, the Obama administration implemented more restrictive regulation of oil exploration and production in the areas just offshore of the United States. The cost of drilling offshore oil wells is likely to increase significantly as a result. Based on current assessments of these areas there are an estimated 18 billion barrels of oil there. As a result of the environmental catastrophe associated with the British Petroleum oil spill in the Gulf of Mexico there has been a considerable controversy about developing these oil resources. Environmentalists argue that the effect on a fragile ocean ecosystem makes drilling and pumping oil from these locations too costly. Thus they strongly oppose drilling there.
(A) What will happen to the long-run aggregate supply curve (LRAS) as a result of the implementation of these more restrictive regulations on drilling for offshore oil?
The Chairwoman of the Federal Reserve has announced in her last conference that if the labor market continues to show signs of improvement they will continue with the tapering process and eventually the increase in the benchmark interest rate. How th..
Equipment purchased 2 years ago for $70,000 was expected to have a useful life of 5 years with a $5,000 salvage value. Its performance was less tha expected and it was upgraded for $30,000 one year ago. If replaced the existing equipment will be sold..
List the potential costs and benefits of placing a substantial percentage of pay at risk for all employees in the following types of organizations: a hospital, a restaurant, a brokerage firm, and a fashion design house.
The economy has recently turned around, and one of your colleagues suggests that you could hire 25 people for $50,000 per employee to do the sales job as independent agents at a cost of goods sold (COGS) of only 0.5%. What concerns might you have abo..
In 2016, a nation's population was 10 million, its real GDP was $1.21 billion, and its GDP deflator had a value of 121. By 2017, its population had increased to 12 million, its real GDP had risen to $1.5 billion, and its GDP deflator had a value of 1..
Monetary cooperation: Please compare the advantages and difficulties for flexible and for fixed exchange rates.
Household finances are similar in some ways to a nation’s international transactions. Suppose a household consumes (spends) more than its income. What are 3 legal ways it can finance this deficit? Give an example of each. How can a nation that runs a..
Currently there is a debate about whether high employment rates in the US are the result of cyclical factors or structural factors. Describe this debate? What impact might immigration have on the different types of unemployment?
How do you think each of the following affected the world price of oil? a) A major war began in the oil-rich Middle East. b) The Alaskin oil pipeline was completed. c) The ceiling on the price of oil was removed. d) Oil was discovered in the North Se..
According to data provided by British Rail to the Mergers and Monopolies Commission, the 1988 costs of a Sprinter (Class 150/2) train were: Capital Cost 525,000, Annual costs (per unit): Depreciation 26,300, Overhaul and maintenance 32,600, Stabling ..
If you were macroeconomic policymaker, how do you balance the short-run tradeoff between inflation rate and unemployment rate? Explain. What is the historical relationship between rates of unemployment and inflation in the U.S. economy? What are the ..
When Seth told Anita, "Your plan for purr semester project is not going to work." she snapped back with, "I don't hear you coming up with anything better." When he asked Anita about the incident later, she explained that PMS (premenstrual syndrome) h..
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