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How does insuring all the workers at a given firm tend to reduce adverse selection problems? How does requiring physical exams have a similar effect?
The total number of movie projections, M, is the sum of the number paid for by each of the two persons: M = MS + ML. Spielberg and Lucas both have income of 70, and the price of both the private good and a movie projection is 1. They are limited, ..
Suppose that the demand for Federal funds curve is such that the quantity of funds demanded changes by $160billion for each 1 percent change in the Federal funds interest rate. Also, assume that the current Federal funds rate is at the 3 percent r..
The spring unwinds as the piston moves down, and the pressure and volume drop to 0.7 MPa and 0.5 m3 at the end of the process.
Figure 1 illustrates the market for chocolate bars. If a new tax of $1.50 a chocolate bar is imposed, what is the change in the quantity of chocolate bars bought, who pays most of the tax, and what is the deadweight loss?
Often, insurers will let policyholders choose a low deductible, or will offer them a larger deductible in exchange for a substantial reduction in the premium. Explain how this two-tiered system helps insurers deal with the problem of adverse selec..
it would open new horizons for entrepreneurship; and, most important, it would help to clean up domestic politics." Separate and identify the arguments for free trade in this statement.
Explain why an inverted (downward-sloping) yield curve may indicate that a recession is coming.
Suppose that, instead of a minimum wage of $4, the government is providing a subsidy to employers to raise the equilibrium wage to $4. How much will this subsidy have to be and what will the new equilibrium level of employment be
If this really were the LM curve that we thought best characterized the economy, would we lean toward the use of fiscal policy or monetary policy? (You may assume your goal is to affect output.)
Obviously, given their limited resources and available technology, as they use more of their resources for corn production, there are fewer resources available for breeding poultry. Maximum annual output options Quantity of Corn(pounds) Quantity o..
Your answer should demonstrate that the prices that are used to calculate real GDP do affect the calculated growth rate, but typically not by very much.
Suppose the demand equation is 200x + 10p = 10000, where x is the number of items sold when the per unit price is p dollars.
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