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What is the lowest price that you expect pollution permits to sell for? What is the highest price you expect pollution permits to sell for?
Calculate the cost of Teller's share of the cleanup. Do the same for Penn, and then compute the total cost of reducing PFC emissions by 20 metric tons.
How much is Marcy willing to pay to get him to stop? What is the minimum amount of money Al is willing to accept in exchange for his silence?
What is the efficient number of cows to keep on the common pasture?-?2, 3, or 4? Explain. If Jerry keeps 2 cows in the pasture, how many should Ben keep?
You subscribe to the print and digital versions of The Economist for 12 weeks is to get you reading and thinking about international business in today's world.
If the marginal benefit of a good exceeds the marginal cost at the current level of output, then:
Draw indifference curves for both Bill and Ted in your Edgeworth box. Draw Bill's indifference curves with thick lines, and Ted's with thin lines.
Construct an Edgeworth box for Chris and Pat. Derive the contract curve for Chris and Pat. What shape will it take?
Be sure to draw indifference curves for both Johnny and June, and to show their respective marginal rates of substitution at the initial allocation.
If Al believes that a fair division means giving equal amounts of cash to everyone, how much should he give to Bud and Kelly?
What is the highest level of welfare that the commune can achieve, and how must utility be divided among Bob, Carol, and Ted?
Explain how pork and beef might be linked on the demand side of the market. Explain how pork and beef might be linked on the supply side of the market.
Calculate the partial equilibrium effects of the change in the demand for wine. What happens to the price? What happens to the quantity?
Equate supply and demand in the wine market, and simplify to express the price of wine as a function of the price of cheese.
What is the immediate effect of the increase in demand on the price and quantity of yellow corn?
What is the immediate effect on the price of peanut butter and the quantity consumed? What is the residual effect on the price of jelly?
How does the production contract curve relate to Pareto efficiency? How does production possibilities frontier relate to the marginal rate of transformation?
What does input efficiency imply about the relationship between the marginal rate? How does the consumption contract curve relate to Pareto efficiency?
What are the three requirements of an efficient market? What can the Edgeworth box be used to examine? What does an Edgeworth box plot?
Describe the two branches of general equilibrium analysis. List three types of social welfare functions and discuss what they mean.
What is Danielle's expected income if she is uninsured? Her expected utility? What is Danielle's expected income? Her expected utility?
Calculate Steve's expected income and expected utility. What salary would provide Steve with the same utility he expected to receive as a traveling salesman?
Calculate the net present value of the ostrich if interest rates are 11%. Does the NPV method indicate that Ralph should buy the ostrich?
Calculate exactly how much you will have in that account using the formula for compound interest. How close are your answers to (a) and (b)?
If interest rates are 6%, what is the most your sister should be willing to pay for the IOU? What is the most your sister should be willing to pay for the IOU?