Evaluate the following: The rise in the relative cost of education and health care is evidence of the inefficiency of these sectors of our economy.

1. The process for the cost of debt assumes the times interest earned is a good proxy for measuring credit risk, what other financial variable if any should be considered? Does this assumption limit the results? ( each time the level of debt changes. Will this occur and does this limit the applicability of your results?
2. The base level of interest rates, the risk free rate, changes over time. Is this important in calculating the optimal level. Since the estimate is based on the current environment does it matter if this changes?
3. The beta may change over time, does keeping it constant limit your results or is that an acceptable assumption?

What is the policy ‘remedy’ for each inflation: Demand-pull and Cost-push

Explain the factors that affect the firm's total cost, and explain the behaviour of a typical firms costs in the short run and long run. In addition, what determines the behaviour of a typical firm's costs in the short run and long run.

A monopolist can produce at a constant average and marginal cost of ATC = MC = $5. It faces a market demand curve given by Q = 53 - P.

5. Suppose there are N firms in the industry, all with the same constant MC = $5. Find the Cournot equilibrium. How much will each firm produce, what will be the market price, and how much profit will each firm earn? Also show that as N becomes large, the market price approaches the price that would prevail under perfect competition. (Hint: your answers will be functions of N)

The government is considering building a major infrastructure project at a cost of €200m. The expected benefits of the project are €500m. (i) Based on the Kaldor-Hicks criteria should the government implement this project? Justify your answer. (ii) A project that satisfies the Kaldor-Hicks criteria is always guaranteed to increase aggregate welfare. True or false? Explain your answer using a numerical example. In your example use the cost and benefits of the project outlined above ( approx 160 words total)

Explain the factors that affect the firm's total cost, and explain the behaviour of a typical firms costs in the short run and long run. In addition, what determines the behaviour of a typical firm's costs in the short run and long run.

What are the effects on U.S economy if the Cost of Health care keeps rising?