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Consider a market with a demand curve of P=10-Q and a supply curve of P=Q. Before the imposition of a tax, equilibrium quantity is 5, and equilibrium price is $5 (verify this). If a tax of $5 per unit is placed on this market, quantity traded falls to 2.5 units. What is the tax revenue generated?
Determine the total consumer surplus and the total producer surplus; Label these areas on your Graph.
If deficit spending "crowds out" some private investment, could future generations be worse off? If external financing eliminates crowding out, are future generations thereby protected?
Discuss income elasticity as it pertains to inferior goods and to normal goods (sometimes also called superior goods).
What is the impact of the shrinking world on whether small to medium sized businesses should engage in international trade.
Unemployment numbers drop as more jobless Americans Find out positions in local businesses. Which determinant of aggregate demand causes the change.
What effect would a depreciation of the U.S dollar, relative to the Chinese Yuan, have on both our exports to China and our imports from China?
Evaluate the arguments of the two partners. For full points please also explain and illustrate their points by identifying the relevant and irrelevant costs for this decision.
Using two-stage least squares, estimate the demand equation in GRETL. Using two-stage least squares, estimate the supply equation in GRETL.
Assume that the industry you wrote about in Assignment 3 wants to expand and has to make some longterm capital budgeting decisions. Now the industry is confronted with government regulations to oversee the merger.
Explicate why the cost structure associated with many kinds of information goods also services might imply a market supplied by a small number of large firms.
We know tastes and preferences play an important role in demand. Do you think of any possible future "popular product".
Starting with the situation in part d, suppose the government starts taxing the population $30 each year without spending anything.
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