#1

Toll lanes on a section of the​ I-40 freeway are being considered in order to reduce traffic congestion and travel times.

Since this is a government​ project, the​ B-C ratio method must be applied in the evaluation. The following are cost and other​ estimates:

-Construction costs​=​$17,200,000

Operating and maintenance costs​ =​$521,000 per year

Projected service life​ =24 years

Savings in travel times and revenues generated from the tolls​ =​$5,152,000 in the first year of operation and projected to increase by 2.5% per year due to the projected annual increase in traffic. In​ addition, environmental analysis estimates that the project will result in increased noise and air pollution that will cause an additional societal health cost of $552,000 the first year and is also projected to increase at 2.5% per year.Assuming zero market​ (salvage) value at the end of 24 years and a MARR of 9​% per​ year, should the toll lanes be constructed?

a). The conventional​ benefit-cost ratio of the project with PW is_______

b). According to the​ B-C ratio​ method, the toll lanes should be constructed or not?

The Market Forces of Supply and Demand (Continued from Q1)

Consider two functions:

Supply function: ? = ? + 5

Demand function: ? = 20 − 4?

a. For some reasons (e.g. wage level rises), the supply decreases. Note that it means the supply curve shifts to the left. More precisely, consider the quantity supplied decreases by 5 units for each price level. Write down a new supply function and draw a graph of the new supply curve and demand curve. [Hint: See part f in Question 1.]

b. Compare the new equilibrium quantity and price (we often call this pair of quantity and price a market outcome) to the old one in part e in question 1. Does the equilibrium price increase? Does the equilibrium quantity increase?

5. Managing the pace of change posed a tricky problem for leaders in the early twentieth century. How did President Wilson try to control the dynamic of social and political change? What methods of change was he unwilling to accept?

a. Define elasticity, calculate and interpret the following elasticities:

b. Outline the three (3) motives of money demand.

c. Highlight any two (2) functions of money.

d. Discuss any five (5) reasons behind the prevalence of poverty in rural areas.

a. „Unemployment is a bad omen for many families as well as the nation at large‟. Discuss the aforementioned statement.

b. With the aid of diagrams, explain how fiscal and monetary policies can be used to deal with the problem of unemployment.

a. Discuss how the cultural environmental factors can affect the retail industry in Botswana. (Make use of relevant examples in your discussion).

b. With the aid of a relevant diagram and an example, outline the concept of opportunity cost.

Annual net profits at a facility are shown in the table below. Total capital for the facility
investment is known to be $ 140 000. Linear as the depreciation method in profitability calculations
depreciation will be accepted. Interest type compound interest and cash flows are separated.
It indicated. In case the minimum acceptable turning speed is 15%,
a) Net return method,
b) Investigate whether the investment is profitable using the net present value method.
Years Net profits, $ / year
1 30 800
2 20 000
3 25 000
4 35 000
5 10 000

What are the two types of union practices discussed in the chapter and how do these affect wages?

Short answer please.

2. Discuss with examples the redistribution cost of inflation.

1.State the distinction between the consumer price index (CPI) and the GDP price index

Suppose there are two countries – Home and Foreign – that produce only coffee and sugar. It takes home workers three hours to produce a bag of coffee; and four hours to produce a bag of sugar. Foreign country is less productive – their workers spend seven hours to make a bag of coffee and a half of a day (twelve hours!) to eventually produce a bag of sugar.

1. Which country has an absolute advantage in coffee? Sugar? Explain intuition in 1-2 brief sentences

2. Which country has a comparative advantage in coffee? Sugar? Explain intuition in 1-2 brief sentences

3. Suppose Foreign country made a technical innovation which improved productivity there by one-third. In other words, foreign workers now spend one-third less time producing a bag of sugar than previously. How does your answer for part b) change?

4. Inspired by sugar producers, Foreign country created packaging technology that allowed them to decrease time to produce a bag of coffee by an hour. How does you answer to part b) change after both improvements?

5. The flow of history was exceptionally unsuccessful for Home country – it was colonized, and home worker morale decreased. As a result, Home country lost most of the mechanical innovations and their productivity become three times slower (i.e. both production times were tripled). Likewise, Foreign country kept all improvements discussed in the previous parts. How do your answers for both parts a) and b) change?

Is a Pigouvian Tax an example of an excise? How are the two related?

Explain how the Federal Reserve influences the quantity of reserves and whether it would be possible without a fractional reserve system. Explain why traditional monetary policy is not currently available for the Fed to achieve its dual mandate (make sure to explain its dual mandate).