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Determine how much a car owner would be willing to invest to achieve the new energy efficiency standards of 54.5 mpg. Assume that gasoline sells for $2.50/gallon and the owner expects to receive a 5% return on their investment. The owner travels 15,000 miles each year.
Suppose that a country has no public debt in year 1 but experiences a budget deficit of $20 billion in year 2, a budget deficit of $20 billion in year 3, a budget surplus of $10 billion in year 4, and a budget deficit of $2 billion in year 5.
Using a supply- and- demand graph and assuming competitive markets, show and explain the effect on equilibrium price and quantity of the following:
Suppose you have a production technology that can be characterized by a learning curve. Every time you increase production by one unit, your costs decrease by $6. The first unit costs you $64 to produce. If you receive a request for proposal (RFP) on..
Consider again the case of a country that suffers an Ebola epidemic that reduces the population by 20%. (a) Given your answer for problem 8 in problem set 1, draw the Aggregate Demand and Aggregate Supply analysis (in the usual output-inflation graph..
What is the process by which a recessionary gap closes itself? Explain. Why might this self-correcting mechanism work slowly in the face of a recessionary gap?
Explain how does trade affect the production possibilities frontier. Illustrate what other factors can expand the production possibilites frontier.
How does lean maintenance differ from the traditional approach under which a maintenance department has the responsibility for all maintenance functions? Which level on the maintenance performance hierarchy would you expect to find a lean maintenance..
What is the actuarially fair price of insurance? What price are individuals w/$5000 in the bank willing to pay for the insurance?3. Will those w/$5000 in the bank voluntarily purchase insurance?
Why does hedging usually take place with a forward contract.
"The problem with economic policy becomes most obvious when attempts are made to tinker with little economic changes, as the tools governments have at their disposal are too crude." This statement is a criticism of
Explain how each of the following developments would affect the supply of money, the demand for money, and the interest rate. For each case, show what happens in a closed economy and in a small open economy.
q1. if the government reports that gdp increased at an annual rate of 6.0 percent for the fourth quarter of 2010 by how
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