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Let’s assume that the old clunker you have been driving needs $500 in repairs in order to pass an annual car inspection. You are considering buying a new car, and you contact car dealers and banks to determine the best deal you can get on a car loan. Assume two different scenarios: (a) The lowest interest rate you find on a five-year car loan is 10 percent, and the annual rate of inflation for the next five years will be 9 percent. (b) The lowest interest rate you can find on a five-year car loan is 6 percent, and the annual rate of inflation for the next five years will be 1 percent.
Question: Discuss Under which scenario—(a) or (b)—will you pay less, in real income, for your car loan? and why?
Please include a discussion of the market conditions and the overall economic conditions that would create an optimal situation for an Entrepreneur considering launching a new business. How do those conditions relate to our current economic condition..
You and your boss are having a discussion about a changing supply factor for the good you bring to market. You manufacture widgets, specifically left-handed widgets for sale in the Maryland marketplace. Your boss has won awards celebrating her entrep..
An investor is considering the construction of a new marina on the Detroit river at a cost of $68m. M&O costs will average $80,000 per year for the first five years, and rise to $100,000 per year thereafter. A major overhaul costing $12m will be requ..
An alternative way for the government to encourage home ownership would be to offer a tax credit instead of a tax deduction. Explain how does this alter its budget if k=0.25.
Robert’s New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners and belongs to a monopolistically competitive market. What are the profit-maximizing price and output levels? Explain them and calculate algebraic..
Oligopolistic models are based on behavioral assumptions. One behavioral assumption associated with differentiated product markets is that price increases will not be matched, but price decreases will be matched. Suppose Firm A controls 50% of the ma..
Elucidate how much consumer surplus would be created by randomly assigning buyer to sellers. Which method gives the larger surplus.
Is the distribution of income in the United States equal or unequal? What are the causes of income inequality? What is the argument in favor of income equality? What is the argument in favor of income inequality? How effective are federal and state i..
Describe Okun's law. Do you believe Okun's law holds up in the current economy? Explain the relationship between unemployment and gross national product (GNP).
Cold beer is sold by roving vendors at Safeco Field, home of the Seattle Mariners. The only competition to this service is beer that can be bought at the kiosks around the stadium. Determine the demand curve for beer sold by the vendors, with Q expre..
"Which expression is another way of saying "marginal cost"? "
Which of these is an example of specialization? Investment by firms like Toyota in UK factories is an example of. When one producer can create a given amount of output with fewer inputs, what exists? A nation has a working age population of 100 mill..
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