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The aluminum industry faces a private marginal cost curve PMC = 2Q and a market inverse-demand curve of PD = 60 – QD. However, production creates an externality with marginal damages of MD = Q. Graph the private marginal cost, the social marginal cost, the marginal damages, and the demand curve. Find the market equilibrium without any government control and the associated deadweight loss. Find the corrective tax which eliminates the deadweight loss, and find the efficient quantity produced. What is the resulting price that consumers face with the corrective tax?
Explain how the CPI differs from the PPI, as a measure of the U.S. inflation rate and why is inflation risk a business management risk - Why is inflation risk a business management risk?
How does Ticketmaster's "dynamic pricing" affect ticket sales, total revenue and profit? Does Ticketmaster provide a valuable service, or is it a necessary evil to purchasers of event tickets?
A Los Angeles firm uses a single input to produce a recreational commodity
With the economy in a recession because of inadequate aggregate demand, the government increases its purchases by $1,200. Suppose the central bank adjusts the money supply to hold the interest rate constant, investment spending is fixed, and the marg..
Your company is bidding on a system design project. It is your job to design the system architecture. How will you balance the need for scalability against the need to keep costs as low as possible to win the bid?
Suppose, as part of an active monetary policy, the Federal Reserve sells government and other securities from its existing portfolio holdings to the banking and financial sectors and the non-bank public. Suppose also that the banking sector is fully ..
Tom earns $15 per hour for up to 40 hours of work each week. He is paid $30 per hour for every hour in excess of 40. Tom faces a 20% tax rate and pays $4 per hour in child care expenses for each hour he works. Tom receives $80 in child support paymen..
Illustrate what does this imply about the effectiveness of monetary and fiscal policy to reduce the unemployment rate.
An individual would suffer higher losses from an unexpectedly higher inflation rate if
Describe the differences between shortages and scarcity. In answering this question you should think difference between the short run and the long run in economic analysis.
Find a pop culture reference (from TV, movie, music, magazine...) of an economic concept. The reference can be anything we have covered in class.
Developing countries are often concerned that their terms of trade might deteriorate as economic growth occurs. In terms of the analysis of part (a) of this question, other things equal, what type(s) of growth must occur and what type of country (“la..
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