You are an economic advisor to the Treasurer of the United States. Congress is considering increasing...

You are an economic advisor to the Treasurer of the United States. Congress is considering increasing the sales tax on gasoline by $.03 per gallon. Last year motorists purchased 10 million gallons of gas per month. The demand curve is such that every $.01 increase in price decreases sales by 100,000 gallons per month. You also know that for every $.01 increase in price, producers are willing to provide 50,000 more gallons of gasoline to the market. The legislature has stated that the $.03 tax will increase government revenues by $300,000 per month and raise the price of gasoline by $.03 per gallon. Is this correct? Explain and show your work.

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Rahul Sunny answered 1 month ago

You are an economic advisor to the Treasurer of the United States. Congress is considering increasing...

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1. Aerospace Co. is considering increasing the amount of debt in its capital structure. The treasurer...

1. Aerospace Co. is considering increasing the amount of debt in its capital structure. The treasurer is worried about the ramifications of that action on the firm’s cost of capital. The following information may be relevant to your analysis. - The company’s capital structure is as follows (figures are in book values): Short-Term Bank Debt $ 7.2 million Long-Term Bond 30.0 Preferred Stock 5.6 Common Equity (8.60 million shares) 136.0 Total $178.8 million The bank debt is currently costing 9.2%....

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You are an economic advisor to the Treasurer of the United States. Congress is considering increasing...

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You are an economic advisor to the Treasurer of the United States. Congress is considering increasing...

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