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Consider two methods of dividing a cake between two people. Method 1 is to throw some of the cake away. Which method do you prefer, and why?
If the price of good 1 is 1, at what price for good 2 will the firm just break even? Graph the firm's profit as a function of the price of good 2.
What is the connection between crime and unequal acess to basic services? Explain at least four connecting factors?
You are requested to construct a model to predict the effect on the economy of the discovery of new oil reserves. How would you model the discovery?
Find the mean average tax rate for the population. Find the mean marginal tax rate for the population. How do these mean rates differ from the actual rates?
What are the determinants of growth in production and consumption in the endogenous growth model?
What are the effects on aggregate output, consumption, and investment? What is the effect on the growth rate? Explain briefly.
Find an expression for the output per worker as a function of the capital-labor ratio.
Explain how in the (Solow) exogenous growth model, output and consumption per worker converge in the long run to steady-state levels.
In the exogenous growth model what are the effects on the steady-state consumption. Give a graphical illustration of each effect on the steady state.
What is the difference between exogenous growth and endogenous growth? Why does the latter give a larger role for public policy?
Discuss the possible implications of making participation in social security voluntary. You can also use arguments of adverse selection and moral hazard.
What are the advantages and problems related to a reform of social security that consists of switching to individual annuitized accounts?
How can the theory explain that IRAs increase savings? What are the income effects and the substitution effects?
What is the present discounted value of her benefits when claiming at either age 60 or age 65? At what age should she claim her benefits?
Prove that there will be at least one equilibrium level of tax evasion. Show how multiple equilibria can occur. Which equilibria are stable?
What could be a credible audit strategy? What is the impact on the equilibrium audit strategy of an increase in the cost of auditing?
Tax evasion is sometimes described as ‘contagious,' meaning that an increase. In such circumstances, is the only equilibrium to have everyone evading?
It is found that the amount of income not declared is, on average, different among the countries. Discuss possible explanations for this finding.
In many voting situations the electors can gain by voting strategically. Why will a consumer never make a strategic choice of jurisdiction?
What is the willingness to pay of the rich residents for the local public good? What is the willingness to pay of the poor residents?
What will be the equilibrium distribution of residents? Are there still residents unhappy with the amount of local public good?
How much public good will be provided under majority voting in each district? Is there any resident who wants to move? Why or why not?
Economic exigency requires that consumers exploit all opportunities to increase their welfare. Does this argument legitimize tax evasion?
What if their inclusion implied that tax evasion should not be punished? Would you provide the same arguments for violent crimes?