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A study found that lower airfares led some people to substitute flying for driving to their vacation destinations. This reduced the demand for car travel and led to reduced traffic fatalities, since air travel is safer per passenger mile than car travel. Using the logic suggested by that study, suggest how each of the following events would affect the number of highway fatalities in any one year. An increase in the price of gasoline A large reduction in rental rates for passenger vans An increase in airfare
The single most important health policy choice in the United States over the past four decades has noting. What evidence can you cite to support your position?
"How do people decide how much to work?" Time is scarce resource you may know this very well as a student. There's just not enough time to do everything we'd like to do. How do we decide how much of our time to spend working? "How do firms decide w..
Forecasters predictions of inflation are notoriously inaccurate, so their expectations of inflation cannot be rational.
The Teenager Company makes and sells skateboards at an average price of $70 each. During the past year, they sold 4,000 of these skateboards. The company believes that the price elasticity for this product is about -2.5. Which of the following would ..
Assume that a consumer has the utility function U(x,y) = (3x+1)y, where x and y represent the quantities of two goods, X and Y. For parts (a)-(h), assume that good X costs pX=$3 per unit and good Y costs pY=$4 per unit. “Wealth” and “income” have the..
Explain the concept of supply and demand in your own words and provide two examples of how you see it at work: one from the news and one from personal experience. State the difference between demand and quantity demanded, as well as the difference be..
Given the following MV information, what is the optimal allocation of care according to the Paretean criteria, when the marginal cost of care is constant at $100? Person A Person B Quantity of Care Consumed MV Quantity
Horsehead, Massachusetts lies on a bay inhabited by lobsters. The town council issues permits for trapping lobsters and is trying to determine how many permits to issue. Assume that is costs $2,000 to operate a lobster boat and that if there are x bo..
Suppose tariffs of $2 were imposed. Calculate the effect on producer surplus, consumer surplus, government revenue and the deadweight loss.
Statistical analysis indicates that a=0.8 and b=0.3. The firm's owner claims the plant has increasing returns to scale.
Can there be a deficit on Current Account and a deficit on Capital Account at the same time? Explain. Explain why currency depreciation leads to an improvement in a nation's balance of trade. How is the exchange rate determined in a freely floating r..
The market for roofing services suffers from asymmetric information because customers don't know the quality of roofers' work. Which of the following DOES NOT help overcome this information problem?
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