4. When the product demand curve is P = $5 – $0.05Q, and Q = 40, the point price elasticity of demand is: When the product demand curve is P = $5 – $0.05Q, and Q = 40, the point price elasticity ofdemand is: When Q=40 then, P=5-0.05*40=5-2=3If the quantity is 1 then price will be, P=5-0.05=4.95The…
Research and development activities are widely considered to have positive effects. Consider the market for innovation. The market demand for patents is Qd=100-10P, where Q is the number of patents produced and P is the price for each patent. Suppose the market for patents is competitive and that the market supply curve is Qs=2P-8. Finally, suppose the external benefit from innovation is: MSB=8+1.5Q. This external […]
The problem of informational asymmetry in health care markets can undermine the normative interpretation of the demand curve as representing marginal benefits.T or F ASSIGNMENT 1 The problem of information asymmetry in health care markets can undermine thenormative interpretation of the demand curve as representing marginal benefits. Trueor false.The above…
Question 4. (10 points) A consumer has the utility function U(X,Y) = X0.6 Y 0.24. Her income is $9600 and she faces prices Px=8 and Py=12. Would this consumer prefer to be taxed on good Y at 25% or a revenue equivalent income tax. Illustrate your answer.
Assume Mindy gains utility from consumption C and leisure L. The total non-labor income she gets is $550 per week and the total non-sleeping time she can allocate between work and leisure is 110 hours per week. Her utility function is U(L, C) = L*C. a) What’s the marginal rate of substitution of L for C? b) Calculate Mindy’s reservation wage. c) If Mindy’s non-labor […]
Topic Paper 3-4 pagesA recent merger of note is that of Hewlett Packard and Compaq Computers. When the merger was announced, it was widely criticized as not making ‘economic sense.’ analyze the reasons for and against the merger, and to assess the performance of the consolidated company since its completion.The merger continues to be in the news, and most recently the CEO of the merged […]
The Pullman Company has a lot of pull in the town of Pullman, Illinois. Everybody in town is identical, and they all work for the company, which pays them each $10 a day. Their favorite food is apples, which they get from a mail order catalogue for $1 apiece. 1.Draw the typical resident’s budget line between “apples” and “all other goods” (measured in dollars). Draw […]
Suppose the market demand and supply equations are Qd = 150 – 3P and Qs = 25 + 2P, respectively. If the government intervenes in the market to support a price floor of $30, the total cost to the taxpayer is: a. $750. b. $850. c. $1,050. d. $1,250. e. None of the above Suppose the market demand and supply equations are Qd = 150 […]
Between 1973 and the early 1990s, consumers responded to: a. high oil prices by agreeing to cap-and-trade policies to limit the use of oil. b. high oil prices by buying small, fuel-efficient cars. c. low oil prices by using other types of energy. d. low oil prices by buying large cars, trucks, and SUVs that were not fuel-efficient.
Source: Income, Poverty, and Health Insurance Coverage in the United States: 2010. U.S. Department of Commerce, Economics and Statistics Administration, U.S. CENSUS BUREAU, Issued September 2011 Distribution of Income by Quintile The U.S. Census Bureau publishes a vast array of statistics about the U.S. Economy. One of their publications – Income, Poverty, and Health Insurance Coverage in the United States: 2011 – is particularly relevant […]
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