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suppose that in a competitive market for electric power, demanded for power is given by the equation P=600-Q, and supply is given by the equation P=160+Q where P is price and Q is quantity of some good or service. Production of each unit of output Q leads to a marginal external cost of $50, caused by pollutants emitted by the production of Q. If we add this marginal external cost to the market information, the equation for the social cost supply cure is given by P=210+Q
a) compute the unregulated market level of output and price as well as the socially efficient level. By how much does the market output exceed the socially efficient output, and by how much is the market price below the socially efficient price?
b) compute the monetary valueof the deadweight social loss from the market failure that occurs if society lets firms to continue to produce negative externalities without regulation
c) Suppose a tax per unit output (per unit tax) is impose on the production of Q with the intent of making equal the market level of output and the socially efficient level. How high should that per unit tax be?
d) what is the gain in net social benefits that results from this per unit tax?
If the United States lost hundreds of thousands of jobs, how is it that NAFTA was a best decision for the US also probably not for Mexico and Canada
Explain how do you balance human suffering with the economic realities.
When 2-mutually exclusive projects are considered, NPV calculations and IRR calculations may, under certain circumstances, give conflicting recommendations as to which project to accept.
Explain how do the fiscal policy changes play a role in the theory of political business cycles
A. if the rate discount is 20 percent, A. would you rather receive $ 100 today or $ 120 in one year ? B. would you rather receive $ 205 today or $ 240 in one year ? C. would you rather receive $ 500 in one year ?
Elucidate what is the difference among real GDP and nominal GDP.
Assume that initially the goods and services market is in equilibrium at potential of output and that the government budget is balanced,
Explain How did the resolution affect the short and long run costs of the firm. What are the lessons to be learned that can be applied to your position at Acme Motors in Nuevo Laredo.
Assume your expected incomes in years one and two are $60,000 and $70,000 respectively. You have 40,000 in cash in year 0. Market interest rates for one-year loans are 8% in year 0 and 14% in year 1.
Compute the 10-year growth rate forecast using the constant growth model with annual compounding, and the constant growth model with continuous compounding for each occupation.
What fixed amount of money should the company plan to set aside each year, at 8% interest per year, compounded annually, in order to make the above payments? Ans: $4,427.82.
Derive an expression for the marginal utility of good 1, and for the marginal utility of good 2. Using these, solve for an expression describing the slope of an indifference curve: MRS(x1,x2).
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