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A country which does not tax cigarettes is considering the introduction of a $0.40 per pack tax. The economic advisors to the country estimate the supply and demand curves for cigarettes as: QD =
140,000-25,000P QS = 20,000 + 75,000P,
where Q = daily sales in packs of cigarettes, and P = price per pack. The country has hired you to provide the following information regarding the cigarette market and the proposed tax.
Calculate the deadweight loss from the tax. Could the tax be justified despite the deadweight loss? What tax revenue will be generated? (Answer should include graph).
Based upon your stakeholder analysis, identify what you think will be the greatest potential roadblock you will encounter from stakeholders? Summarize the issue and discuss ideas you have for addressing it in a proactive manner. In your posts to peer..
The following question is based on fixed exchange rate and/or flexible exchange rate regime in an open macroeconomic model. The answers must be written in your words along with graphical illustration. Without explaining in your words, the graphical i..
In oral or English Auctions, the highest bidder wins but only has to outbid the second highest bidder. Does this concept make sense to you? What bidding experiences have you participated in?
You have borrowed $50,000 at an interest rate of 12%. Equal payments will be made over a three-year period. The first payment will be made at and of the first year. What will be the annual payment be?
Which firm would you expect to make the lowest profits, other things equal? Bertrand oligopolist. Cournot oligopolist. Sweezy oligopolist Stackelberg leader
Draw the demand curve Q = 200 – 10P. Calculate the price elasticity of demand at prices of $5, $10, and $15 to show how it changes as you move along this linear demand curve.
Using relevant diagrams, explain why the impact of expansionary fiscal policy in a fixed exchange rate regime differs from the impact of expansionary fiscal policy in a flexible exchange rate regime.
If the economy were at a steady-state unemployment rate with a separation rate of 0.04 per month and a job-finding rate of 0.15 per month, and the labor force was 200 million, How many individuals would lose their jobs each month? What is the natural..
they have the same demand curve for computer services. Use a graph to illustrate the overall value of computing services to the consumer. What does this imply about the profit maximizing price HAL can charge for the computer hardware.
In the law of diminishing returns, we see increasing returns at the start of production, production then exhibits diminishing returns until it peaks, and then will exhibit negative returns if we attempt to push beyond that. Provide two examples of ho..
Given the production function between nurse hours and patient visits per day to a community clinic, how will each of the following shift this function: A change inures remuneration from salary to fee for service. A change in the case mix of patients,..
Are the salaries received by professional sports athletes outrageously high? Should the CEO's of financial institutions receive more monetary compensations than entertainers, since their jobs contribute more to the development of the country? What ar..
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