ECON-UA 2 Lecture 9: Microeconomics Ch 7- Everything You Need to Know about Consumers, Producers, and Efficiency

15. [3 Marks] Assume a standard competitive market (upward sloping supply, downward sloping supply) where all benefits of an item go the the buyer and all costs are borne by the seller. Which of the following is true about an increase in a per-unit tax? A. TS will 1; GS may for t. B. TS will \; GS will t. C. TS will ; GS will 1. D. TS may for t.; GS may for E. TS may for t.; GS will 1.

What is the value of the derivative dC/d(Y-T)?

Y=C(Y-T)+ I(Y) + G

C= 500+.75(Y-T)
I = 50 + .1Y
G = 300
T = 200

1. Two mutually exclusive alternatives Project C and D have the following investments and cash flows

Proyecto C Proyecto D

Investment at period t = 0 $40,000 $40,000

Cash flows t = 1 10,000 20,500

Cash flows t = 2 10,000 20,500

Cash flows t = 3 47,000 20,500

1. Calculate the NDV and IRR of each project the company