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1. Suppose coal-burning firms are emitting excessive pollution into the air. Suggest two ways the government can deal with this market failure
2. Explain the impact of external costs and external benefits on resource allocation
Amos McCoy is currently raising corn on his 100 acre farm and earning an accounting profit of $100 per acre. However, if he raised soybeans, he could earn $200 per acre. Is he currently earning an economic profit Why or why not
The current interest rate (at which he is free to borrow and lend) is 5 per cent. This means that if Jack saves one dollar today, he will get 1.05 dollars tomorrow. Also, if he borrows 1 dolalr today, he needs to pay back 1.05 dollars tomorrow.
A particular firm must pay $10 per unit of labor and $250 per of capital. the firms marginal product of labor is 80 and its marginal product of capital is 270. is this currently cost minimizing is not how should the firms adjust its input mix
Consider two goods, Gorillas (G) and Chimpanzees (C). Your utility function for gorillas and chimpanzees is given by U(G,C)=ln(G)+C. Gorillas cost $10 each, and Chimpanzees cost $4 each. You currently have $200 to spend.
Assume that Hong Kong and Taiwan can supply computers to Ecador at a per-unit price of $300 and $500, respectively. With free trade, how many coputers does Ecuador import From which nation does it import
The deadweight loss of a tax is the area of the triangle between the supply and demand curves. Solve for the deadweight loss as a function of T. Graph this relationship for T between 0 and 300. (Hint: Looking sideways, the base of the deadweight l..
What factors might make either of the two simple models, the excise tax on rentals or the tax on capital, less likely to predict the distribution of the tax burden in the real world?
If an alternative has an advance payment of $100,000 upon contract award and then quarterly payments of $25,000 for the next 3 years, what would the cash flow diagram look like
Chell's demand function is P(ch) = 5-q(ch). Gordon's demand function is P(g)= 3-q(g). Draw the aggregate demand curve. What is the consumer surplus with the price is $2?
Using the information in the application "The Big Freeze" about lettuce industry revenue, create a graph to illustrate why industry revenue may rise after a freeze destroyed some of the crop.
Calculate the firm's maximum profit from the two products.
The present value of K payable after 2 years is $960. If the force of interest is cut in half, the present value becomes $1200. What is the present value if the effective annual discount rate is cut in half
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