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Consider a market with a demand curve of P=10-Q and a supply curve of P=Q. Before the imposition of a tax, equilibrium quantity is 5, and equilibrium price is $5 (verify this). If a tax of $5 per unit is placed on this market, quantity traded falls to 2.5 units. Calculate the deadweight loss created by the imposition of this tax. Hint: a carefully drawn diagram will help you a lot.
Illustrate what are elements of Circular-Flow Diagram. Illustrate what concepts does diagram illustrate.
The newly established Bureau of Time Travel has been given authority to regulate time travel. If the bureau sets a price that allows Time Riders to earn a normal profit (that is, a fair return), illustrate what price will time travelers pay per tr..
Define optimistic, most likelys, and pestimistic scenarios buy using both optimistic, both most likely and both pestimistic estimates. Use a life of 4 years as the most likey value. What is the present worth for each scenario
Use your own example in order to illustrate these concepts. Can the marginal utility from a product be negative? If yes, give an example.
What economic example could be used to demonstrate incentives that were used to "nudge" buyers/sellers
The currency-deposit ratio has been and is likely to remain relatively stable. The ratio of non-transactions deposits to transactions deposits increased by a factor.
An individual has an income of $1000 per month with which they buy the composite good with a price of $1 and food with a price $2/unit of food. draw the budget constraint for the individual with the composite good on the y-axis and food on the x-axis..
Compare the additional revenue Microsoft makes as it moves from 20 million to 40 million copies of Vista with the additional revenue it makes as it moves
Distinguish between the crowding-out effect also the Ricardo-Barro effect. Elucidate how are the two effects related
What can you say about the price elasticity of demand for DVD players. What will this price reduction necessarily lead to an increase in profits for DVD player manufacturers.
Solve for the new equilibrium quantity (Q**), the sellers price (Ps), and the consumer’s price (P**). Solve for consumer surplus, producer surplus, government revenue and total surplus with the tax.
Elucidate what are the arguments in favor and in opposition to an independent central bank.
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