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One view is that life is one big externality: just about everything someone does affects someone else either positively or negatively. To permit government to deal with externality problems is to permit government to tamper with everything in life. No clear line divides externalities in which government should become involved from those it should not. Having read the chapter 17, do you support this position? Why or why not?
A local church parish wants to raise money to add to their campus. In a sample from a previous fund raising campaign, the parish found that of the 136 people in the sample they contacted, that 67 actually contributed money. When testing (at the 5% le..
is this the same quantity that the competitive market would have provided in equilibrium? What are the market forces leading to this quantity?
Indicate how Ford's management should use this information to make sound strategic decisions.
Medicare beneficiaries started to receive outpatient prescription drug benefits beginning in 2006, with the implementation of Medicare Part D. As a result, Medicare’s share of national prescription drug spending increased. Explain how the pharmaceuti..
The city of Touristburg has implemented a lodging tax equal to 2% of gross revenue at local hotels. If you stay in a hotel that costs $250 per night for 3 nights, how much will you pay in lodging taxes? The city of Touristburg estimates the annual gr..
Using any data set on the wages of a large number of American workers, it is easy to show that on average the wages of Asian-Americans are higher than the average wage of the population as a whole. Does this fact necessarily demonstrate that there is..
What is the marginal rate of substitution (MRS) and why does it diminish as the consumer substitutes one product for another? Use examples to illustrate.
You are the owner of a local Honda dealership. Unlike other dealerships in the area, you take pride in your “No Haggle” sales policy. Last year, your dealership earned record profits of $2 million. What price should you charge for a midsized automobi..
The largest loan that the bank can make on the basis of the new deposit. If the bank chooses to hold reserves of $3,000 on the new deposit, what are the excess reserves on the deposit.
Explain the effect of the following changes on the quantity demanded of health insurance. A. A reduction in the tax-exempt fraction of health insurance premiums B. An increase in buyer income C. An increase in per capita medical expenditures D. New t..
Crepe Creations is considering franchising its unique brand of crepes to stall-holders on Hermoza Beach, which is five miles long. How many franchises should now be awarded if we make the standard assumption that the effort costs of the stall holders..
Assume a perfectly competitive firm is currently producing 5,000 units of output and is earning $15,000 in total revenue. The corresponding average total cost is $3.50 and total fixed costs equal $1250. Based on this information, should this firm con..
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