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Consider a small, open, city that represents a small share of the population of the surrounding country. People can freely and costlessly move into and out of the city from the surrounding area. Within the city, all workers commute, by private automobile, to offices in a business district at the city's center. There is no consumer or factor substitution in the markets for office space or housing.
If a tax on gasoline was imposed, which had the effect of increasing worker commuting costs, describe what the effect would be on each of the following in 2 or 3 sentences.
a. the radius of the city
b. worker wages
c. the radius of the central business district
d. the utility of workers
A contractor estimates maintenance costs for a new backhoe to be $275 for the first month with a monthly increase of 0.5%. The contractor can buy a 4 year maintenance contract for $18,500 at any point.
You are given the following two IS curves that show how real GDP (Yt) in the current time period t depends on the current interest rate and interest rates in previous periods, where rt is the interst rte in time period t. Furthermore each time per..
How would population growth effect the dynamically efficient allocation, given the model in question 2 the second period has a higher demand for the depletable resource. What effect would the addition of population growth have on the efficient all..
Determine the correlation coefficient. If you use Excel, please attach a printout of your spreadsheet and highlight the numbers that you plug into the formulas.
If people behave according to rational expectations theory, people would expect the rate of inflation this year to be:
Explain how country A with comparative advantage in boot making and country B with comparative advantage in wine making can gain from trade with each other. Include in your explanation from where the gains are coming.
Currently, it is difficult to sue the federal goverment unless it agrees to be sued. If the law were changed so that lawsuits (such as by victims of the collapse of the I-35W bridge) were easier, how would this change the incentives.
Is the firm operating in pure competitive market or monopoly market and why - Draw the TR, demand curve, marginal revenue curve in one figure.
Why are banks able to maintain reserves that are only a fraction of the demand and savings deposits of their customers? Is your money safe in a bank? Why or why not?
When a company is faced by a kinked demand curve, the marginal revenue curve will be:
Explain the equimarginal principle. Describe and explain a monopolist’s output decision. Explain why a price-fixing cartel is difficult to maintain. Put in plain words the concepts of adverse-selection and moral hazard. Explain the consequences of a ..
In a perfectly competitive industry if each firm is identical then we can calculate the number of firms in the industry by
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