For each scenario, assess whether an externality is present.

a. Vaccinating children against influenza reduces its incidence among elderly.

b. Newly graduated nurses flock to reaching hospitals for training. After working for a year, many leave work for competitors.

c. A couple who planned to move to Florida to retire find that the plummeting house market has wiped out equity.

d. Physicians complain that they spend a third of their time explaining to patients why television advertisement about medications for their conditions do not apply to them. ( NO PLAGIARISM PLEASE , 80 WORDS ESSAY FOR A, B, C, AND D PLEASE )

In simple terms, how does one write out the Phillips curve equation? What figures/information is required?

Consider a monopoly firm facing a demand curve Q = 100 – P. This firm has fixed costs =$1000 and constant marginal cost =$20. Total costs are $1000 + $20Q and average costs are $1000/Q + $20.

a. What is the firm’s profit maximizing level of output? What price does it charge to sell this amount of output? How much profit does it make? What is consumer surplus at this level of output? Show your work.(8)

b. Suppose this firm was regulated by the government, and that the regulation required that the firm charge a price equal to marginal cost. Calculate the number of units demanded and profit at this level of output. Is this policy sustainable? Why or why not?(7)

c. As an alternative, consider a regulation that is meant to allow the firm to earn a “reasonable rate of return” for operating. After analyzing the firm’s costs, the regulator allows the firm to charge $36 per unit produced. Calculate quantity demanded and profit under this policy. Is this a sustainable price? Why or why not?(7)

Define for each scenario whether AD (Aggregate Demand) or AS (Aggregate Supply) will shift, and indicate if it will be an outward shift (rightward) or inward shift (leftward).

a. A fall in the price of oil

b. A rise in consumer optimism

c. A hurricane destroys factories in South Carolina

d. Foreigners watch fewer U.S.-made movies

e. New inventions occur at a faster pace

f. A faster money growth

QUESTION 1

If an economy has perfect income equality, explicitly describe what that economy's Lorenz Curve would look like.

QUESTION 2

Briefly describe a situation where you believe two workers should have perfect income equality. Briefly describe a situation where you believe it's okay for two workers to experience income inequality.  

QUESTION 3

An economy's Lorenz Curve reveals that an economy's highest income quintile has 65% of the economy's income while the lowest income quintile only has 5% of the economy's income. Solely based on the Lorenz Curve, is this distribution of income fair? Why or why not?

QUESTION 4

To combat income inequality and to generate increased tax revenues to fund expenditures, government officials decide to aggressively increase how progressive income taxes are, so much so that the top income earners are marginally taxed 90% of their income (and while this marginal tax rate may seem oppressive, these top income earners still have more than enough income to satisfy all of their needs and all but the most extravagant of wants - basically, these earners have more than enough money).

Argue why this tax policy is a fair approach to fund government expenditures.

Why might this tax policy fail to achieve its objectives (tax revenues would actually decline as a result)?

Please discuss a contract you are a party to - indicating what party you are and what type of contract it is using vocabulary from this chapter.

Subject BUS 201 Business Law

1. Given that the interest rate can be determined by the equilibrium of the demand and supply of money, the central bank could raise or lower the interest rate indirectly by increasing or decreasing the money supply. Does the Bank of Canada take this approach? Why or why not?
2. In March 2020, the Bank of Canada decided to lower the overnight interest rate from 75% to 0.25%.
   1. While the bank has a target for the overnight rate, the rate itself is market-determined. What is the bank rate and how does the Bank of Canada use it to influence the overnight rate?
   2. Briefly explain how a decrease in the overnight interest rates eventually results in a change in the money supply. Is the Bank of Canada active or passive in the money supply change?

why is the level of output at which marginal revenue equals marginal cost the profit maximizing output?

Consider the world oil market, in which a cartel (OPEC) and a competitive fringe (rest of the world) are operating. Suppose that global oil demand and the supply of the competitive fringe are given by the following functions:

Qw=80-P

Qf=-60+p

suppose the cartel is comprised of 2 countries, let each countries marginal cost function be as follows:

MC1=5+2Q2

MC2=5+2Q2

1. Derive the marginal cost function (?C?) of the cartel. (2 pt)

2. Calculate the price at which the competitive fringe would be driven out of the

market (?1) and the price at which the cartel would be driven out of the market

(?2). (2 pt)

c. Due to the presence of the competitive fringe in the market, there will be a kink

point in the demand curve of the cartel. Calculate the price (?) and quantity (?) at

which this kink occurs. (2 pt)

d. Derive the demand function of the cartel to the left of the kink point quantity (i.e.,

for ?? ≤ ??�) and to right of the kink point (i.e., ?? ≥ ?). (2 pt) ????

e. Using the inverse demand function of the cartel, derive the corresponding marginal revenue function to the left of the kink point and to the right of the kink point. (2 pt)

f. Using the inverse demand and marginal revenue functions that you obtained in parts d. and e., calculate the cartel’s output (?? ) and the price charged per unit of output (??). ?? (2 pt)

7. Calculate the output of the fringe (?f ) at this price, along with the total output (?? + ?? ) supplied in the global oil market. (2 pt)

8. Calculate the output of each of the two members of the cartel; Q1 and Q2

Mary is a single mother, with $250 in nonlabor income per week, and she can earn $15 per hour working between 0 and 60 hours per week. If Mary decides to work, then she will neeed to pay high-quality day care, which costs a fixed $150 per week. Now suppose a welfare program is put in place to subsidize the cost of day care for single mothers working at least 20 hours per week. Suppose that as long as the single mother works less than 40 hours, the full $150 cost is reimbursed. For those work more than 40 hours per week, the $150 rebate is reduced by $7.5 for every additional $15 earned (i.e. every additional hour worked), so that it is completely phased out for those work 60 hours. Draw a diagram that reflects the budget line with this new program in place. (Don't worry about being exactly proportional, just capture the main features of the program, i.e. intercept, slope, and kinked points if any.)

In the US, a cash market for kidneys is not allowed. That is, one is not allowed to sell one’s kidney (or another’s) for money nor profit. Discuss the problem of allocating kidneys without a cash market and discuss how a cash market might solve the problems of those who might supply or demand a kidney. Following Hazlitt, include as part of your discussion not only the groups directly party to such a cash market transaction, but also at least one party not directly involved that would be impacted by the market’s creation.

An auto-part manufacturing company is considering the purchase of an industrial robot to do spot welding, which is currently done by skilled labor. The initial cost of the robot is $250,000, and the annual labor savings are projected to be $125,000. If purchased, the robot will be depreciated under MACRS as a seven-year recovery property. This robot will be used for five years after which the firm expects to sell it for $50,000. The company’s marginal tax rate is 25% over the project period.

Determine the net after-tax cash flows for each period over the project life. Assume MARR=15%.