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When do consumers pay the most of a sales tax? When do producers pay most of the tax?
How should sunk cost be taken into account in decision making? (include example if possible).
Given that sales taxes cause deadweight loss, what should be the elasticities of the products taxed that would minimize that loss?
When does the government make the most revenue from a sales tax?
Describe the Harrod-Domar growth model, and explain precisely how the model illustrates dynamic instability. Why is it often called the “knife’s edge model”?
Suppose an individual faces employment risk of the following form: Her employment is subject to business cycles in which she faces the risk of a layoff with probability 10%. When she is employed, she receives an income of $100. She earns nothing when..
Show graphically and explain how increasing the depreciation rate affects the bundle of capital and labor that a firm chooses for production.
A 15 year bond having a face value of $5000 and a coupon rate of 6 percent per 6 months payable semiannually was purchased for $7000 8 years ago, and the 16th interest payment was just made. What can it be sold for now if a buyer's desired return..
What are the effects of inflexible prices? What are the fundamental questions on demand shock? Why are the demand shocks so important? Why government is responsible in resolving economic shocks?
Alfred, Beth, and Charles orally agreed to start ABC Computers (“ABC”), a business to manufacture and sell computers. Alfred contributed $100,000 to ABC, stating to Beth and Charles that he wanted to limit his liability to that amount. How should ABC..
Explain the difficulty of defining and using the user cost of capital and discuss the value in making decisions based on it, rather than accounting expense data. Present how to make the most economical downsizing decisions. Include the mix of capital..
When conducting a rate of return (ROR) analysis involving mutually exclusive alternatives, the first step is to:
Illustrate what is marginal product of capital in this situation. What must the saving rate be to achieve the Golden Rule level of capital.
When marginal revenue is greater than price the firm's profit is always positive. When an increase in the quantity results in a reduction in profit marginal cost is greater than marginal revenue. Generally, to maximize profit is to minimize cost.
1. consider 2 countries avataria and twilightia which can be described by the solow model. avataria has a capital-labor
A new machine would cost $18,000, have operating costs of $1,000 in the first year, and have a salvage value of $10,000 at the end of the first year. For the remaining years, operating costs increase each year by 15% over the previous year’s operatin..
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