Markets and the Economics of the Public Sector

Purpose of Assignment

Students will employ the supply and demand model to develop consumer surplus and producer surplus as a measure of welfare and market efficiency. Students learn about welfare economics–the study of how the allocation of resources affects economic well-being–and will discover that under most circumstances, the equilibrium price and quantity is also the one that maximizes welfare. Students will review different sources of externalities and a variety of potential cures and will see that while markets are usually a good way to organize economic activity, governments can sometimes improve market outcomes. Students will see how the U.S. government raises and spends money and the difficulty of making a tax system both efficient and equitable.

Assignment Steps

Scenario: Imagine you have been assigned the responsibility of preparing a paper for the governor’s next economic conference.

Prepare a 1,050-word paper addressing the following:

  • Explain why equilibrium of supply and demand is desirable.
  • Explain the following concepts using the concept of consumer and producer surplus:
    • Efficiency of markets
    • Costs of taxation
    • Benefits of international trade
  • Discuss how externalities may prevent market equilibrium and the various governments policies used to remedy the inefficiencies in markets caused by externalities.
  • Analyze the difference between the efficiency of a tax system and the equity of a tax system as it refers to the costs imposed on taxpayers using the benefits principles.

The Banking System and Risk Management

Financial management is a critical component of the broader subject of risk management. Inadequate financial management makes an organization vulnerable to a number of risk exposures.

Organizations in the finance sector have a greater impact on the aggregate economy than organizations in other sectors. The consensus among scholars and academics alike is that the private banking industry was insufficiently regulated prior to the most recent financial crisis. This lead to inappropriately relaxed risk management environments within banks, which lead to the near collapse of the global economy.

For this assignment, you will write a minimum three-page paper (not including APA title or references pages). In this paper, please address the following questions:

  • What are the specific ways banks impact the economy?
  • How was the regulatory environment revised?
  • Is the regulation effective?
  • What risk management standards had to be employed as a result of legislation?
  • What are the consequences of failure to meet the standards outlined by regulators?
  • Would a firm be prudent to properly manage their level of leverage and liquidity if it were not regulated? Why or why not? What tools can organizations employ to manage these risks?

Consumer Demand Analysis and Estimation Applied Problems

Consumer Demand Analysis and Estimation Applied Problems

Please complete the following two applied problems:

Problem 1:

Patricia is researching venues for a restaurant business. She is evaluating three major attributes that she considers important in her choice: taste, location, and price. The value she places on each attribute, however, differs according to what type of restaurant she is going to start. If she opens a restaurant in a suburban area of Los Angeles, then taste is the most important attribute, three times as important as location, and two times as important as price. If she opens a restaurant in the Los Angeles metropolitan area, then location becomes three times as important as taste and two times as important as price. She is considering two venues, respectively, a steak restaurant and a pizza restaurant, both of which are priced the same. She has rated each attribute on a scale of 1 to 100 for each of the two different types of restaurants.

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BUS640 Week 2, Problem 1 chart

Show all of your calculations and processes. Describe your answer for each question in complete sentences.

Which of the two options should Patricia pursue if she wants to open a restaurant in a suburban area of Los Angeles? Calculate the total expected utility from each restaurant option and compare. Graph is not required. Describe your answer, and show your calculations. Which of the two options should she pick if she plans to open a restaurant in the Los Angeles metropolitan area? Describe your answer, and show your calculations. Which option should she pursue if the probability of finding a restaurant venue in a suburban area can be reliably estimated as 0.7 and in a metropolitan area as 0.3? Describe your reasoning and show your calculations. Provide a description of a scenario in which this kind of decision between two choices, based on weighing their underlying attributes, applies in the “real-world” business setting. Furthermore, what are the benefits and drawbacks, if any, to this method of decision making?

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Problem 2:

The demand function for Newton’s Donuts has been estimated as follows:

Qx = -14 – 54Px + 45Py + 0.62Ax

where Qx represents thousands of donuts; Px is the price per donut; Py is the average price per donut of other brands of donuts; and Ax represents thousands of dollars spent on advertising Newton’s Donuts. The current values of the independent variables are Ax=120, Px=0.95, and Py=0.64.

Show all of your calculations and processes. Describe your answer for each question in complete sentences, whenever it is necessary.

Calculate the price elasticity of demand for Newton’s Donuts and describe what it means. Describe your answer and show your calculations. Derive an expression for the inverse demand curve for Newton’s Donuts. Describe your answer and show your calculations. If the cost of producing Newton’s Donuts is constant at $0.15 per donut, should they reduce the price and thereafter, sell more donuts (assuming profit maximization is the company’s goal)? Should Newton’s Donuts spend more on advertising?

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Economics of Risk and Uncertainty Applied Problem

Week 1 – Assignment

Economics of Risk and Uncertainty Applied Problem Please complete the following two applied problems. Show all your calculations and explain your results.

Problem 1: A generous university benefactor has agreed to donate a large amount of money for student scholarships. The money can be provided in one lump sum of $12 million in Year 0 (the current year), or in parts, in which $7 million can be provided at the end of Year 1, and another $7 million can be provided at the end of Year 2.

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Describe your answer for each item below in complete sentences, whenever it is necessary. Show all of your calculations and processes for the following points:

Assuming the opportunity interest rate is 8%, what is the present value of the second alternative mentioned above? Which of the two alternatives should be chosen and why? How would your decision change if the opportunity interest rate is 12%? Provide a description of a scenario where this kind of decision between two types of payment streams applies in the “real-world” business setting. Problem 2:

The San Diego LLC is considering a three-year project, Project A, involving an initial investment of $80 million and the following cash inflows and probabilities:

BUS640 Week 1, Problem 2 Chart

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Describe your answer for each question in complete sentences, whenever it is necessary. Show all of your calculations and processes for the following points:

Describe and calculate Project A’s expected net present value (ENPV) and standard deviation (SD), assuming the discount rate (or risk-free interest rate) to be 8%. What is the decision rule in terms of ENPV? What will be San Diego LLC’s decision regarding this project? Describe your answer. The company is also considering another three-year project, Project B, which has an ENPV of $32 million and standard deviation of $10.5 million. Project A and B are mutually exclusive. Which of the two projects would you prefer if you do not consider the risk factor? Explain. Describe the coefficient of variation (CV) and the standard deviation (SD) in connection with risk attitudes and decision making. If you now also consider your risk-aversion attitude, as the CEO of the San Diego LLC will you make a different decision between Project A and Project B? Why or why not?

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Economics

An airplane crashes as the result of a non-negligent defect in an instrument supplied by A . The airplane was manufactured by B from various components, including the instrument from A, and is operated by C, an airline. What economic difference does it make, if any, whether A is liable for the damages resulting from the crash, or B or C?

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Economics

Describe three factors influencing the market demand and three factors influencing supply curves for the chosen firm’s product or service (e.g. how would a change in consumer income affect demand). You are also to explain the concept of price elasticity of demand and explain why you believe demand is elastic or inelastic in the long and short run.

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Economics

Is it arguable that there is a greater economic justification for strict products liability to bystanders that for strict liability to purchasers of the product?

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Economics

Offer an economic explanation for why the owner of a dog is liable for the harm it causes due to negligence, whereas the owner of a tiger is strictly liable for any harm that it causes?

 

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Economics

The rungs of ladders must be constructed to support the weight of the people who climb them. Compare the relative efficiency of a precise government standard for ladders concerning their weight that the rungs must support, as opposed to the rule that the strength of the rungs should be determined as suits arise in a case-by-case basis using the Hand rule.

 

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Economics

Suppose that a person who is burned in accident suffers intense pain for one week and then fully recovers. What does “perfect compensation” mean in principle to the bum? Why do you expect actual compensation to be imperfect?

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Economics

To what extent can the Life Cycle Hypothesis of Consumption explain recent changes in the savings rate in the USA?Explain and illustrate your answer in no more than 2,000 words (including references)

 

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Economics

Discuss the economic pros and cons of making social hosts liable for accidents caused by guests who have drunk too much liquor at the host’s party.

 

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Economics

The President of Bartavia is being advised on economic policy by you, his economic advisor. Assume that Bartavia is very close to the full employment level (resources are almost all fully employed in the economy) but the President of Bartavia is still worried about unemployment. Therefore he wants to enact some expansionary fiscal policy. How would you explain the logic of a potential short run trade-off between unemployment and inflation to the President? In other words, why might there be an inverse relationship between unemployment and inflation over the short run when the economy is very close to full employment and no technological advances are occurring simultaneously?

Develop a response that includes examples and evidence to support your ideas, and which clearly communicates the required message to your audience. Organize your response in a clear and logical manner as appropriate for the genre of writing. Use well-structured sentences, audience-appropriate language, and correct conventions of standard American English.

 

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Economics

Replacement rates provide information relating to the financial incentive to work. The replacement rate is the ratio between net income out of work and net income when in work.Briefly analyse how replacement rates in Ireland compare to other OECD countries? You can get data from http://www.oecd.org/els/benefitsandwagesstatistics.htm
Discuss the implications of high replacement rates for the unemployment rate.
Your answer to question 1 should not exceed 2 typed pages (Times New Roman, size 12, double spaced). The 2 page limit is inclusive of any references, tables and graphs.

Suppose legislation is passed which places a legal requirement on employers to provide free dental care to all employees. This raises the cost of an employee by €2 per hour.What effect does this new law have on the demand for labour? Explain using a graph.If employees place a value on the free dental care that is exactly equal to its cost, what effect does the new law have on the supply of labour? Explain using a graph.Suppose that workers do not value the dental care at all. How does this affect the supply of labour? How does it affect the number of people unemployed? Explain using a graph.

 

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Economics

Critically analyse the impact of the ‘transpacific partnership (TPP) agreement’ on Australia’s ability to achieve an ecological sustainable society.You will need to discuss the implications of the TPP agreement (assuming it is implemented) using the material from Topics 1-5 and particularly the meaning of sustainability, how our society can achieve sustainability, the impediments to change and technological and institutional lock-in.
You will need to specifically make reference to ‘investor-state dispute clauses’ which are part of most free-trade agreements so there is a general literature on this.You will need to engage with some published papers on the transpacific partnership agreement which has been proposed for many years and academics and others have discussed the general implications of the agreement as well as the environmental implications.
In addition, you should make reference to the leaks of components of the agreement and use the mainstream and non-mainstream press to help with your analysis. In terms of non-mainstream press you could source from Democracy Now, The Real News Network, The Conversation, and Crickey, amongst others.

 

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Economic

The question is based on material in the Text. Text material which may be relevant to the question may be drawn primarily from any of Text chapters 3, 4, 5, 6, 8 or 9 (with those highlighted likely to be the most important). The question addresses the following learning outcomes:be able to apply demand and supply analysis to make a range of market related decisions be able to critically examine and demonstrate why it might be necessary for government to intervene in the production of goods and services and in the distribution of income

Answer the following:At the end of the 1970s, the respective prices of fish dinners and lamb dinners in Sydney’s fine dining restaurants were approximately the same. By 1983, following a period of drought, the price of a lamb dinner in fine-dining restaurants in Sydney was twenty percent higher than the price of a fish dinner at similar restaurants. Over the same period, the ‘health industry’ had been extolling the virtues of eating fish rather than red meat and increased fish consumption had resulted in a threat to the sustainability of fishing particular species especially important to the fine-dining restaurant trade. How should the government respond?

Question 2 (20 marks)

The question is based on material in the Text. Text material which may be relevant to the question may be drawn primarily from any of Text chapters 12 or 13 (with the chapter highlighted likely to be the most important).The question addresses the following learning outcome:be able to make decisions that incorporate the relevant benefits and cost analysis

Answer the following:Newspaper companies appear to be under threat of becoming irrelevant as the sale of newspapers has plummeted over the last 20 years. If you were chairman of the board of a newspaper company, how would you respond? (Hint: Consider newspapers as one of many alternative sources of accessing news)

 

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Economics

“Screpanti delves into the inner workings of global imperialism, explaining how it is different from past forms of imperialism, how the global distribution of wages is changing, and why multinational firms have strained to break free of national markets. He sees global imperialism as a developing process, one with no certain outcome. But one thing is clear: when economic crises become opportunities to discipline workers, and when economic policies are imposed through increasingly authoritarian measures, the vision of a democratic and humane world is what is ultimately at stake.”

Go sentence by sentence in this review, explaining very carefully what each of these sentences mean. For example, how is contemporary imperialism different form past forms? Why and how is the global distribution of wages changing? Why do MNC’s strain to break free of national markets? What obstacles to national markets impose? What is the nature of the discipline on global workers that economic crises provide? What is authoritarian about the way in which economic policies are imposed. Who writes these policies and how are they tied to global imperialism? Why and how exactly is the vision of a democratic and humane world at stake?

 

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Taxation

Thomas began a business, Gold, Inc., on July 1, 2010. The business extracts and processes silver ore. During 2012, Thomas becomes aware of DPAD and would like to take advantage of this deduction. Identify the relevant tax issues for Gold, Inc.Further, the DPAD is unlike other tax deductions and is designed to provide a tax benefit in a somewhat unique manner. Based on the readings and examples, how is this deduction so unique? What types of businesses are permitted to use this deduction? Does the deduction fit the needs of those it serves?

Selection of Tax Issues:Milton and Shirley file a joint tax return on which they itemize their deductions and report AGI of $50,000. During the year, they incurred $1,500 of medical expenses when Brenda injured her knee. Furthermore, their dentist informed them that their son, Bryan, needs $5,000 of orthodontic work done to correct his overbite. Milton also needs a new pair of glasses that will cost approximately $500. What tax issues should Milton and Shirley consider? Explain.

 

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Economics

Question:Distinguish between potential and actual economic growth and discuss the main factors determining each.1500 words

Guidance:The answer should be well structured with an introduction and conclusion and a substantial paragraph on each concept, including diagrams. The question will give you the opportunity to display your knowledge and understanding of actual and potential growth.
Define and explain actual and potential growth.
Explain the causes of each type of growth.
Explain the business cycle and aggregate demand.

Explain productivity and its importance in economic growth.
Explain the factors affecting each type of growth

A minimum of six sources should be used and Harvard referencing must be followed .Basic essay writing skills should be demonstrated, including an introduction, a conclusion, and effective paragraphing.
Resources:
Please find a list of resources for your use.
Gillespie, A (2014) Foundation of Economics
Bannock, G and Baxter R.E. Penguin Dictionary of Economics
Begg, D (2009) Foundations of Economics
Conway, E (2009) 50 Economics Ideas You Really Need to Know
Mankiw G & Taylor, M. (2011) Economics 2nd Edition
Mankiw G, Essentials of Economics
Mankiw G, Principles of Economics
Anderton, A (2006) Economics
Sloman, J Economics
Stanlake, S. J. Introductory Economics
www.Tutor2u.net, www.bized.co.uk, www.economicsonline.co.uk, www.economicshelp.org
Economics Review magazine
Economics Today magazine

 

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Economics

The question is based on material in the Text. Text material which may be relevant to the question may be drawn primarily from any of Text chapters 12 or 13 (with the chapter highlighted likely to be the most important).The question addresses the following learning outcome:be able to make decisions that incorporate the relevant benefits and cost analysis Answer the following:
Newspaper companies appear to be under threat of becoming irrelevant as the sale of newspapers has plummeted over the last 20 years. If you were chairman of the board of a newspaper company, how would you respond? (Hint: Consider newspapers as one of many alternative sources of accessing news)
Discuss in brief, how consumers choices (and access) to secure news from various sources have increase ( internet, TV etc) over the years due to technological advances

Then explain how increased choices and preferences have put pressure on news paper companies and what options they have.You might get some ideas from figures presented in chapter 12 of the textbook, using the concept of budget constraints and indifference curve.Using recent development in technology and theoretical concepts presented in Chapters 12 and 13 discuss what strategies you would pursue as a Chairman

 

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Taxable income,

Question # 4. Stewie loaned a friend $12,500 to buy some stock 3 years ago. In the current year the debt became worthless. a. How much is Stewie’s deduction for
the bad debt for this year? (Assume he has no other capital gains or losses.) b. What can Stewie do with the deduction not used this year? Question # 5. Ken paid
the following amounts for interest during 2010: Qualified interest on home mortgage $4,700 Auto loan interest 850 “Points” on mortgage for acquisition of personal
residence. 300 Service charges on his checking account 40 Mastercard interest 300 Calculate Ken’s itemized deduction for interest on Schedule A. Question # 6.
Jerry made the following contributions during 2012: His synagogue (by check) $980 The Republican Party (by check) 180 The American Red Cross (by check) 150 His
lodge for a holiday party 100 In addition, Jerry donated used furniture to the Salvation Army costing $2,000 with a fair market value of $400. Assuming Jerry has
adjusted gross income of $45,000, has the necessary written acknowledgments, and itemizes deductions. Compute the amount that would be eligible for the Gifts to
Charity section of Schedule A, what is Jerry’s deduction for 2012. Question # 7: Quince Corporation has taxable income of $450,000 for its 2012 calendar tax year.
Calculate the corporation’s income tax liability for 2012 before tax credits. Question # 8: Ulmus Corporation has $1,230,000 in taxable income for 2012. Calculate
the corporation’s income tax liability for 2012. Question # 9: For its 2012 tax year, Ilex Corporation has ordinary income of $240,000, a short-term capital loss
of $60,000, and a long-term capital gain of $20,000. Calculate Ilex Corporation’s tax liability for 2012. Question # 10: Cedar Corporation has an S corporation
election in effect. During the 2012 calendar tax year, the corporation had ordinary taxable income of $200,000, and on January 15, 2012, the corporation paid
dividends to shareholders in the amount of $120,000. a) How much taxable income, in total, must the shareholders of the corporation report on their 2012 tax
returns? b) Explain your answer

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Federal Tax

On June 28, 2011 a corporation sold an apartmentbuilding for $150,000 (exclusive of the land). The buildingoriginally cost $100,000 (exclusive of the land), and since thattime, the corporation has claimed $65,000 in accelerateddepreciation under ACRS. The recapture rules applicable to trustsand estates require that $9,000 of the gain be listed as ordinatyincome. How much of the gain must the corporation include inordinary income as depreciation recapture?
2. During 2011 Paxton Inc., a calendar year taxpayer, placedthe following properties into service on the dates noted (ignorethe Section 179 deduction and bonus depreciation)
3/15/11 7 year property costing $295,000
12/1/11 5 year property costing $205,000

a) If no other properties were placed in service in 2011,determine Paxton’s 2011 and 2012 depreciation deductions underMACRS.

b) If both properties had been placed in service on March 15,determine Paxton’s 2011 and 2012 depreciation deductions underMACRS.
3. On November 28, 2011 a taxpayer purchased for $2,000,000 arental building with commercial stores on the first floor (TotalMonthly Rent $10,000) and apartments on the upper two floors (TotalMonthly Rent $4,000). Compute the taxpayer’s depreciation for 2011and 2012, assuming the building is sold by the taxpayer on March 2,2012.Â
4. Mr. Green and Mr. Brown form a corporation to carry on anew business. In exchange for $175,000 worth of the newcorporation’s stock, Green transferred to the corporation $25,000in cash and Properties A and B. Property A had a value of $75,000and a basis of $50,000; Property B had a value of $100,000 and abasis of $75,000 and was subject to a $25,000 mortgage. In exchangefor $50,000 worth of the new corporation’s stock, Mr. Browntransferred to the corporation $25,000 in cash and Property C.Property C had a value of $175,000, a basis of $100,000 and wassubject to a $150,000 mortgage.
a) Is gain or loss recognized on any of thetransfers?
b) Determine the basis of each shareholder’s stock in the newcorporation.
c) Determine the basis of each property in the hands of thecorporation.Â

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Federal Tax

Write a short explanation that explains the differences between cost and percentage depletion. Why do you think that Congress allowed both methods in the IRS
code? Which method, from the viewpoint of accounting theory, do you think is better? Why?

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Microeconomics

Read again the chapter “Public Goods and Common Resources” in our textbook.
Think about this question: “What is the most obscure example of privatization as a solution of public goods?”
That is, the textbooks shows that sometimes privatization can be an efficient solution of public goods (e. g. elephants). Would it be a solution for roads? For oceans? For police? For army? What is the most obscure according to your opinion?
Find at least one article defending the privatization of the good you have chosen, and at least one article opposing the private solution.
Your text should have the following structure:
Introduce us to the problem of public goods applied to the good you have chosen.
Present and explain the most relevant opposing arguments.
Make your own conclusion about the solution of the case.

Formal requirements:
Cite all the resources used in the reference list at the end of the document. (There is an easy way how to find the proper citation: go to scholar.google.com, find the article or book, then click on “Cite” and then just copy and paste the citation (you can even choose the citation style).)
Your homework must not have less than 1,800 characters or more than 3,600 characters including spaces.
Your text should have a header (with the title, with your name etc.).
Send me the homework only via e-mail as .doc, .docx, or .odt file.
The file should be named “ECO120-4-HW03-YourSurname”. So if your surname is “Chavez” and you are sending the .docx file, it should be named “ECO120-4-HW03-Chavez.docx”.
Important note on plagiarism:
Each time you use somebody else’s thoughts, you have to cite the source. (The source should be cited at two places. First, right after the relevant text (in brackets, or in the footnote), second in the list of references at the end of the document.)
You have to do it even if you just paraphrase. Even paraphrasing without crediting the source falls under plagiarism.
Direct quotation must be always enclosed in quotation marks.

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Econometrics

True, False, Explain (Say whether each statement answer is true or false, then explain why. Your grade depends on the quality of your explanation).When you estimate a regression using a sample from some population, a good way of checking the truth of the assumption that E(u) = 0 in the population is to see if the sample residuals from the OLS regression sum to zero.If you run simple regression relating a standardized test score to class size, and the R-squared value is less than .10, the regression is useless.If the slope estimate in a simple regression is zero (that is, ß1=0), then the average of the dependent variable must be equal to the intercept estimate.The variance of the intercept estimate in a regression will be smaller if the values of the explanatory variable in the sample are more spread out.

 

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