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Do people respond to market incentives? Consider the following policies. How do you expect people to respond to them? What environmental impacts might arise?
(a) Many places require that “brownfields”-places that previously received contamination, usually from industrial use-be cleaned

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Two mutually exclusive projects, A and B, require the same up-front investment in the first year. Project A generates positive net cash flows in years 2 through 5 and nothing after that. Project B generates nothing in years 2 through

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You have just purchased a Kia with a $20,000 price tag. The offers to let you pay for your car in five equal annual installments, with the first payment due in a year.
a. If the

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Identify whether each of the following events poses an adverse selection problem or a moral hazard problem in financial markets.
a. A manager of a savings and loan association responds to reports of a likely increase in federal deposit

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1. List the factors that can shift a perfectly competitive firm’s labor demand curve.
2. Explain why the market demand curve is not the horizontal summation of the firms’ demand curves for labor.
3. List the determinants of

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The poorest countries in the world have a per capita income of about $600 today. We can reasonably assume that it is nearly impossible to live on an income below half this level (below $300). Per capita income in the

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A discussion of labor unions usually evoke strong feelings. Some people argue vigorously against labor unions; others argue with equal vigor for them. Some people see labor unions as the reason workers in this country enjoy as high a standard

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Suppose a firm must employ 20 workers in order to produce 2000 units of output that the firm has contracted to supply to the government for $1.4 million. The firm must choose how much to invest in safety. The firm

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Both population and the workforce grow at the rate of n = 1% per year in a closed economy. Consumption is C = 0.5(1 – t)Y, where t is the tax rate on income and Y is total output. The

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A student consumes root beer and a composite good whose price is $1. Currently, the government imposes an excise tax of $0.50 per six-pack of root beer. The student now purchases 20 six-packs of root beer per month. (Think of