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"Production Costs and Perfect Competition" Please respond to the following:
- You are the owner of a fast-food restaurant. Given a new item that you recently advertised, you experience additional demand for your business that you do not want to ignore. Identify your fixed and variable costs at your fast-food restaurant, and explain the changes to each of these costs, given the increased demand.
- Examine a perfectly competitive firm that you have recently purchased a product from, focusing specifically on how it relates to the characteristics of the market.
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Final Exam. Development Economics
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Final Exam. Development Economics
INSTRUCTIONS: Similar to the problem sets, you must use this Microsoft Word document to answer the questions. After completing the exam, you must ...
environmental economy
Complete the table below, adding the missing information for concentration units reduced and the marginal cost of conc ...
environmental economy
Complete the table below, adding the missing information for concentration units reduced and the marginal cost of concentration reduction for each source. Please write down any formulae you use.
Suppose the goal of the regulator is to reduce total concentrations at the receptor by 7.25 units. What is the optimal concentration reduction from each source in order to achieve the total required reductions? Show how you arrive at your answer.
What is the total abatement cost of emission reduction for each source? What is the economy-wide total abatement cost of achieving the target?
What is the optimal tax rate for each source in order to achieve the required reductions? Show how you arrive at your answer.
Does your answer in part c) make sense? Explain why.
How is your solution to this problem different from a typical solution in a uniformly mixed pollutant problem?
Suppose that the regulator set a uniform tax of $3 per unit of emissions. How many emissions units would each source reduce under this policy? Would this policy achieve the target concentration reduction? Clearly show how you arrive at your answer.
As an economist, which policy would you recommend: the non-uniform tax rate identified in part (d) or the uniform tax policy from part (g)? Justify your answer.
Emmission Units Reduced
Marginal Cost of Emissions Reduction
Concentration Units Reduced
Marginal Cost of Concentration Reduction
Source 1: transfer coefficient= 1
1
2
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2
4
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________
3
6
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4
8
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5
10
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6
12
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7
14
________
________
Source 2: transfer coefficient= .75
1
2
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2
4
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3
6
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4
8
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10
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7
14
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Source 3: transfer coefficient= .5
1
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6
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8
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Consequences of Taxes: The Whiskey Rebellion
This hint were given : Two things will be helpful for this writing assignment. First, clearly identify the benefit. Hint: ...
Consequences of Taxes: The Whiskey Rebellion
This hint were given : Two things will be helpful for this writing assignment. First, clearly identify the benefit. Hint:
the video starts by talking about the revolutionary war against the United Kingdom and the debt
that was incurred. Second, find the definition of tax incidence and use the information given with
respect to price elasticity of demand and supply. The supply side in question is frontier farmers.
University of Phoenix Analyzing NAFTA and the EU Presentation
Prepare a 3 slide presentation for the 2 economies assigned below. NAFTA vs European Union (world’s 2 largest economic e ...
University of Phoenix Analyzing NAFTA and the EU Presentation
Prepare a 3 slide presentation for the 2 economies assigned below. NAFTA vs European Union (world’s 2 largest economic entities)Research each economy assigned . Compare similarities and differences between your assigned countries/economies.Use tables and/or graphs to support your analysis of the following economic statistics/indicators of your 2 assigned economies through the most recent year available since 2009 (the trough of the last economic cycle). Whenever possible, plot the metric for both economies on the same chart.GDP per capita growth over timeEvaluate the reasons why the economic growth of the 2 economies/countries varied. Discuss how international trade influenced the strength of each economy. Discuss the role of value chains and value-added production.Analyze how the failure to use value-added trade measures distorts trade statistics. For example, Boeing and Airbus airliners, Apple iPad and iPhone production, and North American integrated auto and light truck manufacturing.Examine at least 2 industries that have provided each economy a comparative advantage in world trade.Cite at least 2 academically credible sources. Format your citations according to APA guidelines.
Montclair State University Personal Consumption Expenditures Paper
In this box you will analyze the cyclical properties of household expenditure on non-durable goods, on durable goods, and ...
Montclair State University Personal Consumption Expenditures Paper
In this box you will analyze the cyclical properties of household expenditure on non-durable goods, on durable goods, and on services. That is, how these variables correlate with the business cycle and whether there is the smoothing behavior predicted by the theory.Get the following quarterly series from the St. Louis Federal Reserve Bank FRED database from 2002 onwards (note that the first two are provided in monthly frequency and the last two in quarters):- Real Personal Consumption Expenditures: Nondurable Goods (PCENDC96)- Real Personal Consumption Expenditures: Durable Goods (PCEDGC96)- Real Personal Consumption Expenditures: Services (PCESVC96)- Real Gross Domestic Product (GDPC1)Download into Excel*. These series are in levels (i.e. in dollars), so calculate their quarterly growth rate (percentage change from quarter to quarter ---compounded annual rate of change in EDIT GRAPH in FRED) and plot each of the first three series separately against real GDP in all of them [25 points each series].What features do you observe? How are they different? From a firm’s perspective, why are these patterns important? [25 points]The objective of this box is to unify the three indicators into a common framework with emphasis on their correlation and their volatility relative to GDP. Your writing should reflect your familiarity with the concepts and the definitions, along with the theoretical background behind the consumption-saving decision of the household. The theory in the book is about aggregate consumption, and predicts consumption smoothing which is in fact observed in the aggregate, but does it hold in these components of consumption? As always, the charts should have a title and have the axis labeled (with time in x-axis, and label variable(s) and units in the y-axis).
FIN 307 Temple Lyons Solar Technologies Finance Mini Case Questions
(21-1)
Define each of the following terms:
Interest tax shields; value of tax ...
FIN 307 Temple Lyons Solar Technologies Finance Mini Case Questions
(21-1)
Define each of the following terms:
Interest tax shields; value of tax shield
Adjusted present value (APV) model
Compressed adjusted present value (CAPV) model
(21-2)
Modigliani and Miller assumed that firms do not grow. How does positive growth change their conclusions about the value of the levered firm and its cost of capital?
Chapter 21: Mini-case on page 871 (complete parts A through E)
Mini Case
David Lyons, CEO of Lyons Solar Technologies, is concerned about his firm’s level of debt financing. The company uses short-term debt to finance its temporary working capital needs, but it does not use any permanent (long-term) debt. Other solar technology companies average about 30% debt, and Mr. Lyons wonders why they use so much more debt and how it affects stock prices. To gain some insights into the matter, he poses the following questions to you, his recently hired assistant.
Who were Modigliani and Miller (MM), and what assumptions are embedded in the MM and Miller models?
Assume that Firms U and L are in the same risk class and that both have EBIT=$500,000. Firm U uses no debt financing, and its cost of equity is rsU=14%. Firm L has $1 million of debt outstanding at a cost of rd=8%. There are no taxes. Assume that the MM assumptions hold.
Find V, S, rs, and WACC for Firms U and L. Graph (a) the relationships between capital costs and leverage as measured by D/V and (b) the relationship between V and D.
Now assume that Firms L and U are both subject to a 40% corporate tax rate. Using the data given in Part b, repeat the analysis called for in b(1) and b(2) using assumptions from the MM model with taxes.
Suppose that Firms U and L are growing at a constant rate of 7% and that the investment in net operating assets required to support this growth is 10% of EBIT. Use the compressed adjusted present value (APV) model to estimate the value of U and L. Also estimate the levered cost of equity and the weighted average cost of capital.
Suppose the expected free cash flow for Year 1 is $250,000 but it is expected to grow unevenly over the next 3 years: FCF2=$290,000 and FCF3=$320,000, after which it will grow at a constant rate of 7%. The expected interest expense at Year 1 is $80,000, but it is expected to grow over the next couple of years before the capital structure becomes constant: Interest expense at Year 2 will be $95,000, at Year 3 it will be $120,000, and it will grow at 7% thereafter. What is the estimated horizon unlevered value of operations (i.e., the value at Year 3 immediately after the FCF at Year 3)? What is the current unlevered value of operations? What is the horizon value of the tax shield at Year 3? What is the current value of the tax shield? What is the current total value? The tax rate and unlevered cost of equity remain at 40% and 14%, respectively.
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Most Popular Content
10 pages
Final Exam. Development Economics
INSTRUCTIONS: Similar to the problem sets, you must use this Microsoft Word document to answer the questions. After comple ...
Final Exam. Development Economics
INSTRUCTIONS: Similar to the problem sets, you must use this Microsoft Word document to answer the questions. After completing the exam, you must ...
environmental economy
Complete the table below, adding the missing information for concentration units reduced and the marginal cost of conc ...
environmental economy
Complete the table below, adding the missing information for concentration units reduced and the marginal cost of concentration reduction for each source. Please write down any formulae you use.
Suppose the goal of the regulator is to reduce total concentrations at the receptor by 7.25 units. What is the optimal concentration reduction from each source in order to achieve the total required reductions? Show how you arrive at your answer.
What is the total abatement cost of emission reduction for each source? What is the economy-wide total abatement cost of achieving the target?
What is the optimal tax rate for each source in order to achieve the required reductions? Show how you arrive at your answer.
Does your answer in part c) make sense? Explain why.
How is your solution to this problem different from a typical solution in a uniformly mixed pollutant problem?
Suppose that the regulator set a uniform tax of $3 per unit of emissions. How many emissions units would each source reduce under this policy? Would this policy achieve the target concentration reduction? Clearly show how you arrive at your answer.
As an economist, which policy would you recommend: the non-uniform tax rate identified in part (d) or the uniform tax policy from part (g)? Justify your answer.
Emmission Units Reduced
Marginal Cost of Emissions Reduction
Concentration Units Reduced
Marginal Cost of Concentration Reduction
Source 1: transfer coefficient= 1
1
2
________
________
2
4
________
________
3
6
________
________
4
8
________
________
5
10
________
________
6
12
________
________
7
14
________
________
Source 2: transfer coefficient= .75
1
2
________
________
2
4
________
________
3
6
________
________
4
8
________
________
5
10
________
________
6
12
________
________
7
14
________
________
Source 3: transfer coefficient= .5
1
2
________
________
2
4
________
________
3
6
________
________
4
8
________
________
5
10
________
________
6
12
________
________
7
14
________
________
Consequences of Taxes: The Whiskey Rebellion
This hint were given : Two things will be helpful for this writing assignment. First, clearly identify the benefit. Hint: ...
Consequences of Taxes: The Whiskey Rebellion
This hint were given : Two things will be helpful for this writing assignment. First, clearly identify the benefit. Hint:
the video starts by talking about the revolutionary war against the United Kingdom and the debt
that was incurred. Second, find the definition of tax incidence and use the information given with
respect to price elasticity of demand and supply. The supply side in question is frontier farmers.
University of Phoenix Analyzing NAFTA and the EU Presentation
Prepare a 3 slide presentation for the 2 economies assigned below. NAFTA vs European Union (world’s 2 largest economic e ...
University of Phoenix Analyzing NAFTA and the EU Presentation
Prepare a 3 slide presentation for the 2 economies assigned below. NAFTA vs European Union (world’s 2 largest economic entities)Research each economy assigned . Compare similarities and differences between your assigned countries/economies.Use tables and/or graphs to support your analysis of the following economic statistics/indicators of your 2 assigned economies through the most recent year available since 2009 (the trough of the last economic cycle). Whenever possible, plot the metric for both economies on the same chart.GDP per capita growth over timeEvaluate the reasons why the economic growth of the 2 economies/countries varied. Discuss how international trade influenced the strength of each economy. Discuss the role of value chains and value-added production.Analyze how the failure to use value-added trade measures distorts trade statistics. For example, Boeing and Airbus airliners, Apple iPad and iPhone production, and North American integrated auto and light truck manufacturing.Examine at least 2 industries that have provided each economy a comparative advantage in world trade.Cite at least 2 academically credible sources. Format your citations according to APA guidelines.
Montclair State University Personal Consumption Expenditures Paper
In this box you will analyze the cyclical properties of household expenditure on non-durable goods, on durable goods, and ...
Montclair State University Personal Consumption Expenditures Paper
In this box you will analyze the cyclical properties of household expenditure on non-durable goods, on durable goods, and on services. That is, how these variables correlate with the business cycle and whether there is the smoothing behavior predicted by the theory.Get the following quarterly series from the St. Louis Federal Reserve Bank FRED database from 2002 onwards (note that the first two are provided in monthly frequency and the last two in quarters):- Real Personal Consumption Expenditures: Nondurable Goods (PCENDC96)- Real Personal Consumption Expenditures: Durable Goods (PCEDGC96)- Real Personal Consumption Expenditures: Services (PCESVC96)- Real Gross Domestic Product (GDPC1)Download into Excel*. These series are in levels (i.e. in dollars), so calculate their quarterly growth rate (percentage change from quarter to quarter ---compounded annual rate of change in EDIT GRAPH in FRED) and plot each of the first three series separately against real GDP in all of them [25 points each series].What features do you observe? How are they different? From a firm’s perspective, why are these patterns important? [25 points]The objective of this box is to unify the three indicators into a common framework with emphasis on their correlation and their volatility relative to GDP. Your writing should reflect your familiarity with the concepts and the definitions, along with the theoretical background behind the consumption-saving decision of the household. The theory in the book is about aggregate consumption, and predicts consumption smoothing which is in fact observed in the aggregate, but does it hold in these components of consumption? As always, the charts should have a title and have the axis labeled (with time in x-axis, and label variable(s) and units in the y-axis).
FIN 307 Temple Lyons Solar Technologies Finance Mini Case Questions
(21-1)
Define each of the following terms:
Interest tax shields; value of tax ...
FIN 307 Temple Lyons Solar Technologies Finance Mini Case Questions
(21-1)
Define each of the following terms:
Interest tax shields; value of tax shield
Adjusted present value (APV) model
Compressed adjusted present value (CAPV) model
(21-2)
Modigliani and Miller assumed that firms do not grow. How does positive growth change their conclusions about the value of the levered firm and its cost of capital?
Chapter 21: Mini-case on page 871 (complete parts A through E)
Mini Case
David Lyons, CEO of Lyons Solar Technologies, is concerned about his firm’s level of debt financing. The company uses short-term debt to finance its temporary working capital needs, but it does not use any permanent (long-term) debt. Other solar technology companies average about 30% debt, and Mr. Lyons wonders why they use so much more debt and how it affects stock prices. To gain some insights into the matter, he poses the following questions to you, his recently hired assistant.
Who were Modigliani and Miller (MM), and what assumptions are embedded in the MM and Miller models?
Assume that Firms U and L are in the same risk class and that both have EBIT=$500,000. Firm U uses no debt financing, and its cost of equity is rsU=14%. Firm L has $1 million of debt outstanding at a cost of rd=8%. There are no taxes. Assume that the MM assumptions hold.
Find V, S, rs, and WACC for Firms U and L. Graph (a) the relationships between capital costs and leverage as measured by D/V and (b) the relationship between V and D.
Now assume that Firms L and U are both subject to a 40% corporate tax rate. Using the data given in Part b, repeat the analysis called for in b(1) and b(2) using assumptions from the MM model with taxes.
Suppose that Firms U and L are growing at a constant rate of 7% and that the investment in net operating assets required to support this growth is 10% of EBIT. Use the compressed adjusted present value (APV) model to estimate the value of U and L. Also estimate the levered cost of equity and the weighted average cost of capital.
Suppose the expected free cash flow for Year 1 is $250,000 but it is expected to grow unevenly over the next 3 years: FCF2=$290,000 and FCF3=$320,000, after which it will grow at a constant rate of 7%. The expected interest expense at Year 1 is $80,000, but it is expected to grow over the next couple of years before the capital structure becomes constant: Interest expense at Year 2 will be $95,000, at Year 3 it will be $120,000, and it will grow at 7% thereafter. What is the estimated horizon unlevered value of operations (i.e., the value at Year 3 immediately after the FCF at Year 3)? What is the current unlevered value of operations? What is the horizon value of the tax shield at Year 3? What is the current value of the tax shield? What is the current total value? The tax rate and unlevered cost of equity remain at 40% and 14%, respectively.
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