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Question: A single-stage centrifugal blower is to be selected for an engineering design application. Suppliers have been consulted, and the choice has been narrowed down to two new models, both made by the same company and both having the same rated capacity and pressure. Both are driven at 3,600 rpm by identical 90-hp electric motors (output). One blower has a guaranteed efficiency of 72% at full load and is offered for $42,000. The other is more expensive because of aerodynamic refinement, which gives it a guaranteed efficiency of 81% at full load. Except for these differences in efficiency and installed price, the units are equally desirable in other operating characteristics such as durability, maintenance, ease of operation, and quietness. In both cases, plots of efficiency versus amount of air handled are flat in the vicinity of full rated load. The application is such that, whenever the blower is running, it will be at full load. Assume that both blowers have negligible market values at the end of the useful life, and the firm's MARR is 20% per year. Develop a formula for calculating how much the user could afford to pay for the more efficient unit.
(Hint: You need to specify important parameters and use them in your formula, and remember 1 hp = 0.746 kW.)
Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.
Some commentators have argued that the failure of the “Super committee” is good thing for the economy? Do you agree?
Case study analysis about optimum resource allocation: - Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..
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Explain the impact of external costs and external benefits on resource allocation; Why are public goods not produced in sufficient quantities by private markets? Which of the following are examples of public goods (or services)? Delete the incorrec..
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Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:
Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..
"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"
Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"
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