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To save on gasoline expenses, Edith and Mathew agreed to carpool together for traveling to and from work. Edith preferred to travel on I-20 highway as it was usually the fastest, taking 25 minutes in the absence of traffic delays. Mathew pointed out that traffic jams on the highway can lead to long delays making the trip 45 minutes. He preferred to travel along Shea Boulevard, which was longer (35 minutes), but rarely had traffic jams. Edith agreed that in case of traffic jams, Shea Boulevard was a reasonable alternative. Neither of them knows the state of the highway ahead of time. After driving to work on the I-20 highway for 1 month (20 workdays), they found the highway to be jammed 3 times. Assuming that this month is a good representation of all months ahead, should Edith and Mathew continue to use the highway for traveling to work? How would you conclusion change for the winter months, if bad weather makes it likely for traffic jams on the highway to increase to 6 days per month? How would your conclusion change if Mathew purchased a new smart-phone app that could show the status of the highway traffic prior to their drive each morning, thus reducing the probability of them getting into a jam down to only 1day per month (where on this day, the app showed no traffic jam, but a jam developed in the meantime as they were driving along the highway).
Give some arguments for and against the critisim of the federal income tax exemption of interest on state-local debt as being an inefficient subsidy.
Elucidate the impact of the global financial crisis of 2008-2009 on the economies of industrialised countries and emerging markets. What effect do problems like these have on attitudes towards free trade.
What is the maximum per unit that sellers are willing to pay intermediaries if hiring them saves $8 transaction costs?
In each of the cases listed below determine what this consumer needs to do (in terms of purchasing X and Y) to maximizes their utility.
Get price level stability under these conditions the government should:
The TiVo video recorder, the iPod music player and the Xbox game machine all owe their existence to the same high-tech innovation: smaller, denser, cheaper disk drives.
Find out optimal consumption level of video games and burritos that maximizes total utility.
Which of the non negativity constraints on x1; x2 will bind for small m? c. Derive for the Marshallian demand functions and the indirect utility function. d. Derive the expenditure function for utility level u.
At least one-day is lost in supplying customers with products because of the delays in getting orders into the system.
Give three reasons why firms produce in Germany rather than in a lower-wage country.
Show in an IS-LM and AS-AD graph the effects of an increase in government spending. Next, using the same graph, show how the economy will transition back to the natural rate of unemployment. Explain intuitively how this transition takes place.
Illustrate what does this have on the monetary base, the money supply, total deposits, and economic growth.
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