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Suppose that demand for a product is Q = 1000 – P and supply is Q = 9P. Furthermore, suppose that the marginal external damage of this product is $20 per unit. Suppose this is a negative production externality.
Calculate the Q currently being produced in the private market.
Calculate the Q that is socially optimal.
Is the market currently over- or under producing this good? By how much?
Calculate the deadweight loss associated with the externality.
determine what sales price must be obtained at the end of that period in order for Amjay to break even, when the interest is 12 percent.
Assume you are the plant manager for Crossroads Sign Company, which produces road signs in a market that approximates perfect competition. Due to a slow economy, business has been slow and the company is losing money every month.
NBC executives have developed a new professional sports league—the XBL (Extreme Badmiton League). The short-run production function for televised games has been determined to be Q=25L-2.25L2, where L is the number of players.
Consider an initial stock of 5000 tons of high grade ore. The demand function for this ore is P = 2400 – 0.2Q (Q is measured in tons/year), and the cost of extraction is constant at c = $200/ton. The discount rate is r = 0.10. Recalculate Q0, Q1, p0,..
After bad experiences with a flexible exchange rate, the small open economy of Rivendell decides to fix it exchange rate. Suppose the economy of Rivendell has reached the long run equilibrium. Is trade policy more effective under a flexible exchange ..
Suppose you are considering moving your company’s headquarter from Nashville to LA. Last year you paid $100,000 for an option to buy a building in LA. The option gives you the right to buy the building at a cost of $1,000,000, so that if you ultimate..
When companies in oligopolistic industries announce a proposed merger, it is often met with resistance from antitrust authorities (such as the Federal Trade Commission (FTC) and the Department of Justice (DOJ) in the U.S.). In the U.S., we have seen ..
7) in 1988, the average wage rate was 9.45 an hour and in 2008 the average wage rate was 18 an hour. The CPI in 1988 was 118.3 and in 2008 it was 215.3. which is real wage rate is higher?
Suppose U.S. interest rates decline compared to the rest of the world. What would be the likely impact on the demand for dollars, supply of dollars, and exchange rate for dollars compared to, say, euros?
Consider illegal immigration. How would illegal immigration be affected if all countries had property ownership rights as well defined as in the United States?
Long-Term Investment Decisions Due Week 9 and worth 300 points Assume that the low-calorie microwavable food company from Assignments 1 and 2 wants to expand and has to make some long-term capital budgeting decisions.
q1. two automatic systems for dispensing maps are being compared by the state highway department. the accompanying
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