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When more people buy the more expensive brand name drugs rather than the cheaper generic drugs, how does this affect the cost for health insurance companies? Hint: We are now looking at the health insurance market, not the health care market.
a. In the graph below, show the appropriate curve shifting
b. State the determinant that causes the shift
c. State the changes in the equilibrium price and equilibrium quantity.
Suppose the Fed buys $100 billion in bonds from financial institutions. What effect will this bond purchase have on the money supply if the currency/deposit ratio is .15, the excess reserve ratio is .09, and the required reserve ratio is .06?
Suppose the market for good X has a four-firm concentration ratio of 0.50. Furthermore, assume that total sales in the industry are $1.2 million. Based on this information, we know that sales for the largest four firms in the industry equal (in aggre..
Discuss the difference between them and explain the managerial actions that can influence the firm profitability.
Celeste just borrowed 44,400 dollars. She plans to repay this loan by making equal quarterly payments of 2,730.19 dollars for 25 quarters. If she makes her first quarterly payment later today, then what is the quarterly interest rate on the loan? Ans..
Total surplus in a market does not change when the government imposes a tax on that market because the loss of consumer surplus and producer surplus is equal to the gain of government revenue. The Laffer curve is the curve showing how tax revenue var..
A corporation's marginal tax rate is 34 %. An outlay of $35,000 is being considered for a new asset. Estimated annual receipts are $20,000 and annual disbursements are $9,000. The useful life of the asset is 5 years, and it has no salvage value. Assu..
Everything else equal, when the market supply curve shifts inward, consumer surplus. Everything else equal, given an upward sloping supply curve, if the market demand curve were to shift outward, producer surplus
Suppose Jilbo can make 18 flower pots or 2 coffee mugs per day. Her cousin Jimbo can make 10 flower pots or 6 coffee mugs per day. What is the opportunity cost for Jilbo of producing 1 flower pot? of 18 flower pots? What is the opportunity cost for ..
Elucidate what could be done to encourage people to spend more so as to increase aggregate demand and invariably, create employment possibilities.
What are the two main assumptions underlying the “neoclassical” theory of a short-run labor demand curve that is declining in rising wage rates (i.e., the “Law of Demand”)?
The U.S Tobacco Settlement Agreement between the major tobacco companies and 46 states caused the price of cigarettes to jump 45 cents (21%) in November 1998. Levy and Marea (2006) find only 2.65% drop in prenatal smoking 15 months later. What is the..
When a company is profitable, there is always the threat of new competitors. The market structure may deter new entrants. For example, if there is a significant investment required to enter the market, competition may be minimal. However, if the inve..
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