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Q1. Suppose there is a 50-50 chance that a risk adverse individual with a current wealth of $20000 will contract a debilitating disease and suffer a loss of $10000. Calculate the cost of actuarially fair insurance in this situation and draw a utility income graph to show that the individual will prefer fair insurance against this loss to accepting the gamble insured.
Q2. Suppose that the average household in a state consume 800 gallon of gasoline per year. a 20-cent gasoline tax in introduced, coupled with $160 annual tax rebate per household. Will the household be better or worse off under the new program?
Despite this finding, the government mandates that new cars have air bags, rather than taxing their use. Is this policy a contradiction.
Suppose the entire civilian labor force is 20,000 people and the number of unemployed is 2,000 people.
Exportof goods and services to foreigners is $1 million and import of goods and services from foreigners is $1.5 million.
Elucidate the marginal revenue from the fourth worker
Under oligopoly, if one firm in an industry significantly increases advertising expenditures in order to capture a greater market share, it is most likely that other firms in that industry.
A new Taurus bought in 1994 cost $18,680 and it could have been sold as used in 1995 for $12,600.
Discuss the importance of a well-developed compensation plan in attracting as well as retaining good employees as well as how to keep those plans from "working too well."
Calculate the profit maximizing cost per unit if COST MART has an average wholesale cost of $350 as well as incurs marginal selling cost of $100 per unit
South Korea can produce a maximum of 600 million toaster ovens or 900 million tons of rice per year. The U.S. can produce a maximum of 700 million toaster ovens or 1,000 million tons of rice per year.
If it wants to accomplish this change in the money supply using open-market operations, what should it do.
Assuming that land and labour are complements in a farming production function, what would happen to the wages earned by workers and the rents earned by landowners in Texas.
If she neither borrows nor lends, which project has the higher present value at the interest rate 50%. Which has the higher present value at an interest rate of 5%.
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