Principles of Macroeconomics 2e
2nd Edition
ISBN: 9781947172388
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Chapter 5, Problem 7SCQ
What would the gasoline
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3. Consider the market for paper. The process of producing paper creates pollution. Assume that
the marginal damage function for pollution is given by:
MDF = 3E
where damages are measured in dollars and E is the level of emissions. Assume further that the
function describing the marginal abatement cost of emissions is given by
MAC 120-E
where benefits are measured in dollars and E is the level of emissions.
a. Graph the marginal damage function (MDF) and the marginal abatement cost function
(MAC).
b. What is the unregulated level of emissions Eu? What is the social welfare of this emissions
level?
c. Assume an existing emission quota limits emissions to E = 60. Show on the graph why this
policy is inefficient. What is the deadweight loss caused by this policy?
show written calculation for B
Problem 1:
1. If a stock is expected to pay an annual dividend of $20 forever, what is the approximate
present value of the stock, given that the discount rate is 5%?
2. If a stock is expected to pay an annual dividend of $20 forever, what is the approximate
present value of the stock, given that the discount rate is 8%?
3. If a stock is expected to pay an annual dividend of $20 this year, what is the approximate
present value of the stock, given that the discount rate is 8% and dividends are expected to
grow at a rate of 2% per year?
Chapter 5 Solutions
Principles of Macroeconomics 2e
Ch. 5 - From the data in Table 5.5 about demand for smart...Ch. 5 - From the data in Table 5.6 about supply of alarm...Ch. 5 - Why is the demand curve with constant unitary...Ch. 5 - Why is the supply curve with constant unitary...Ch. 5 - The federal 3mm decides to require that automobile...Ch. 5 - Suppose you are in change of sales at a...Ch. 5 - What would the gasoline price elasticity of supply...Ch. 5 - The avenge annual income rises from 25,000 to...Ch. 5 - Suppose the cross-price elasticity of apples with...Ch. 5 - What is the formula for calculating elasticity?
Ch. 5 - What is the price elasticity of demand? Can you...Ch. 5 - What is the price elasticity of supply? Can you...Ch. 5 - Describe the general appearance of a demand or a...Ch. 5 - Describe the general appearance of a demand or a...Ch. 5 - If demand is elastic, will shifts in supply have a...Ch. 5 - If demand is inelastic, will shifts in supply have...Ch. 5 - If supply is elastic, will shifts in demand have a...Ch. 5 - If supply is inelastic, will shifts in demand have...Ch. 5 - Would you usually expect elasticity of demand or...Ch. 5 - Under which circumstances does line tax burden...Ch. 5 - What is the formula for the income elasticity of...Ch. 5 - What is the formula for line cross-price...Ch. 5 - What is the formula for the wage elasticity of...Ch. 5 - What is the formula for elasticity of savings with...Ch. 5 - Transatlantic air travel in business class has an...Ch. 5 - What is the relationship between price elasticity...Ch. 5 - Can you think of an industry (or product) with...Ch. 5 - Would you expect supply to play a more significant...Ch. 5 - A city has build a bridge over a river and it...Ch. 5 - In a market where the supply curve is perfectly...Ch. 5 - Economists define normal goods as having a...Ch. 5 - Suppose you could buy shoes one at a time, miter...Ch. 5 - The equation for a demand curve is P=483Q. What is...Ch. 5 - The equation for a demand curve is P=2/Q. What is...Ch. 5 - The equation for a supply curve is 4P=Q. What is...Ch. 5 - The equation for a supply curve is P=3Q8. What is...Ch. 5 - The supply of paintings by Leonardo Da Vinci, who...Ch. 5 - Say that a certain stadium for professional...Ch. 5 - When someones kidneys fail, the person needs to...Ch. 5 - Assume that the supply of law-skilled worker is...
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- d-farrow_forwardG please!arrow_forward4. Consider two polluting firms, with the marginal abatement costs of polluters 1 and 2, respectively, equal to MAC₁ = 20-E1 MAC2 = 12-E2 a. What is the unregulated level of pollution for each firm? b. Assume policymakers have decided to cut the level of pollution in half. The way they intend to accomplish this goal is to require both firms to cut their pollution in half. What are the total costs of abatement from the policy? And how are these costs distributed between the firms? c. Is this uniform quota on emissions across firms the most cost-effective manner in which to reduce emissions by 50%?arrow_forward
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