A certain college graduate, Sallie Evans, has $24,000 in student – loan debt at the end of her colle… Show more A certain college graduate, Sallie Evans, has $24,000 in student – loan debt at the end of her college career. The interest rate on this debt is 0.75% per month. If monthly payments on this loan are $432.61, how many months will it take for Sallie to repay the entire loan? • Show less
xed percen… Show more The effort required to maintain a scanning electron microscope is known to increase by a fixed percentage each year. A hightech equipment maintenance company has offered it services for a fee of $25,000 for the fi rst year (i.e., end of year 1) with increases of 6% per year thereafter. If a biotechnology company wants to pay for a 3-year contract up front to take advantage of a temporary tax loophole, how much should it be willing to pay if it uses an interest rate of 15% per year • Show less
Since its founding in 331 B.C.E., the city of Alexandria has been a center of trade for the Mediterr… Show more Since its founding in 331 B.C.E., the city of Alexandria has been a center of trade for the Mediterranean countries, as well as the Middle Eastern countries. Part of this is due to geography, but it is also due to the network effect. What is the source of the network effect? • Show less
The World Bank is considering an application from the country of Equatoria for a large dam project…. Show more The World Bank is considering an application from the country of Equatoria for a large dam project. Some costs and benefits of the project (dollar values) are as follows: • Construction costs: $500 million/year for three years • Operating costs: $50 million/year • Hydropower to be generated: 3 billion Kilowatt hours/year • Price of electricity: $0.05/Kilowatt hour • Irrigation water available from the dam: 5 billion gallons/year • Price of water: $0.02/gallon • Agricultural product lost from flooded lands: $45 million/year • Forest products lost from flooded lands: $20 million/year There are also additional, less easily quantifiable, losses: human costs to villagers who will be forced to move, watershed damage, and ecological costs of habitat destruction. It is also possible that the new lake are may contribute to the spread of water-borne diseases. Do a formal cost-benefit analysis using the quantifiable factors listed. Assume that the lifespan of the dam is 30 years; assume that construction begin now (in Year 0). All other impacts start once the dam is completed (in Year 3) and continue for 30 years (until Year 32). For each scenario (a. and b.), indicate a definite “yes”, definite “no,” or uncertain result Scenarios to analyze: A. Do a complete cost-benefit analysis if the interest rate is 5%. Complete the Data summary (for each scenario analyzed) Costs PV Benefits PV Construction $? Hydro Power $? Operation $? Irrigation Water $? Flooded Ag $? Total PV of Benefits $? Flooded Forests $? Total PV of Costs $? Net Benefits (NPV) NB=PVB – PVC ? Discount Rate ?% n ? useful life time of the dam (after construction) Current Value CV(annual) Costs Construction $? Operation $? Flooded Ag $? Flooded Forests $? Benefits Hydro Power $? Irrigation Water $? • Show less
(1/2)P for str… Show more Suppose Chen has demand Q = 40 – 2P for streetlights and Abby has the demand Q = 10 – (1/2)P for streetlights. The cost of building each streetlight is $19. How many streetlights are socially optimal? Compare this socially optimal quantity with the quantity that would be privately purchased. A. How many streetlights would be privately purchased? B. Now suppose that streetlights are a public good. Write an equation for the market demand curve of streetlight consumption. C. How many streetlights are socially optimal? D. Compare this socially optimal quantity with the quantity that would be privately purchased E. If the socially optimal quantity is not equal to the quantity that would be privately purchased, how could government intervene? Can someone help me solve these please? • Show less
According to the production possibilities model, does a reduction in the unemployment rate cause th… Show more According to the production possibilities model, does a reduction in the unemployment rate cause the economy to grow (yes or no)? Explain why or why not. What about Imorovement in technology. • Show less
Discuss how you can use the laws of demand and supply to explain the following scenarios: Scenario 1… Show more Discuss how you can use the laws of demand and supply to explain the following scenarios: Scenario 1: After world gasoline prices jumped in the late 2000s, global bicycle sales rose to more than 1 million per month. Scenario 2: In Wisconsin Rapids,Wisconsin, employees at a CITGO gas station intending to change the posted price of gasoline from $3.43 per gallon to $3.49 per gallon accidentally changed the price to $0.349 per gallon. A station attendant said that, within minutes, “people were coming so fast that everything was crowded like a fairground.”Part 2: Discuss how you would apply demand and supply principles if: In the first scenario, the gasoline prices would have gone down and global sales of bicycle would have reduced. In the second scenario, the employees at the gasoline station would have mistakenly posted the price of gasoline to$34.69 and people would have started running to another gasoline stations within minutes. • Show less
Decrease the quantit… Show more If the price elasticity of demand is E = -1/2, a 10% increase in the price will Decrease the quantity demanded by 5% Increase the quantity demanded by 5% Decrease the quantity demanded by 20% Increase the quantity demanded by 20% • Show less
