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1. What types of solutions can address the tragedy of the commons?
2. What is the main prediction of the Coase theorem?
3. What are the two defining properties of public goods?
4. When is a public good being produced efficiently?
5. Why does the free-rider problem arise?
Suppose that First Bank has $34 million in checkable deposits, Second Bank has $47 million in checkable deposits, and the reserve requirements for checkable deposit is 10%.
Find BC's profit-maximizing output and price. At this price, what is BC's market share?
Consider a point on a supply curve where price and quantity are positive
We return to this issue later in the chapter when we discuss the implications of capital market imperfections.
Why are goods with negative externalities often overproduced? Why are goods with positive externalities often underproduced? Give an example for each.
A firm operating a chain of drug stores consider to open a new store in one of locations. The management of firm figures that at the 1st location the store will show an yearly profit of $20,000 if it is successful and an yearly loss of $2,000 if it i..
A firm produces according to the following production function: Q = K^.5L^.5 where Q = units of output, K = units of capital, and L = units of labor. Suppose that in the short run K = 100. Moreover, wage of labor is W = 5 and price of the product ..
Hernandez Corp. uses two variable inputs, X and Y, to produce its final product, canoes. Its engineering department has estimated the marginal product functions for inputs X and Y as follows: MPx = Y/X MPy = 4 X/Y Where X and Y denote.
Each of these customers are willing to purchase cable service, but only if the price is just equal to, or lower than, his or her willingness to pay. Morgan's willingness to pay is $180; Larry's, $100; Clyda's, $70; Janet's, $40; and Tom's, $0.
Max has the utility function U(x1,x2)= x1(x2+2) a. If the price of good 1 is $2, the price of good 2 is $1, and Max's income is $10, how much good 1 will Max consume? b. Suppose that Max's income level is $10. Derive Max's demand function for good..
Post a full draft of your Final Research Essay to this Discussion by Sunday and then provide feedback on at least two of your peer's papers. Is the thesis clearly stated? Does the author support the claim made in the thesis with a persuasive argum..
Consider the three recent policy debates concerning microfinance (on subsidies, nonfinancial activities, and commercialization). What kinds of evidence would you seek to resolve these, at least in a localized context?
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