Holy cow! The giant manufactory company Whamazon is considering your city to locateits new factory. You are the mayor of the city.Suppose that you estimate the MPC of your city to be 0.67. Suppose further thatWhamazon estimates the immediate new Investment impact upon your city will be $350million.Whamazon is asking for a tax subsidy of $1,000 million ($1 Billion) to locate there.Should you take the offer? Why or why not?Absolutely not. $1 Billion! Your city would end up in the hole the entire $1,000 million.No, your city would end up in the behind $650 million (the $1,000 subsidy minus the $350 newinvestment).Yes, your city comes out ahead $650 million ($1,000 subsidy cost $350 investment)-Yes, your city comes out ahead $1,350 ahead ($1,000 subsidy + $350 investment)Yes, your city comes out ahead $60 million ($1,060 new economic development - $1,000 cost ofthe subsidy).

MPC or Marginal Propensity to Consume. It implies the proportion of an additional increment of…

Holy cow! The giant manufactory company Whamazon is considering your city to locate its new factory. You are the mayor of the city. Suppose that you estimate the MPC of your city to be 0.67. Suppose further that Whamazon estimates the immediate new Investment impact upon your city will be $350 million. Whamazon is asking for a tax subsidy of $1,000 million ($1 Billion) to locate there. Should you take the offer? Why or why not? O Absolutely not. $1 Billion! Your city would end up in the hole the entire $1,000 million. O No, your city would end up in the behind $650 million (the $1,000 subsidy minus the $350 new investment). Yes, your city comes out ahead $650 million ($1,000 subsidy cost $350 investment) - Yes, your city comes out ahead $1,350 ahead ($1,000 subsidy + $350 investment) Yes, your city comes out ahead $60 million ($1,060 new economic development - $1,000 cost of the subsidy).

Holy cow! The giant manufactory company Whamazon is considering your city to locate its new factory. You are the mayor of the city. Suppose that you estimate the MPC of your city to be 0.67. Suppose further that Whamazon estimates the immediate new Investment impact upon your city will be $350 million. Whamazon is asking for a tax subsidy of $1,000 million ($1 Billion) to locate there. Should you take the offer? Why or why not? O Absolutely not. $1 Billion! Your city would end up in the hole the entire $1,000 million. O No, your city would end up in the behind $650 million (the $1,000 subsidy minus the $350 new investment). Yes, your city comes out ahead $650 million ($1,000 subsidy cost $350 investment) - Yes, your city comes out ahead $1,350 ahead ($1,000 subsidy + $350 investment) Yes, your city comes out ahead $60 million ($1,060 new economic development - $1,000 cost of the subsidy).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

The U.S. government estimated4 that Air Force One costs the taxpayers $179,750 per hour. Air Force One is a custom-built Boeing 747 for the president’s use while in office. (There are technically a few planes that are used as Air Force One; whichever one the president is on is called “Air Force One.”) While the president is in office, the president is required by law to use Air Force One for all air travel. The 747 used for Air Force One has 4,000 square feet of space inside on three levels. In addition to having a large office and a conference room, the plane also houses a medical suite and a doctor. The doctor is permanently assigned to Air Force One. The plane has two food preparation galleys that can feed 100 people at a time. There are also quarters on the plane for those people who travel with the president, including senior advisors, Secret Service, and the press. In addition, several cargo jets typically are used to carry extra provisions, people, and…
Knowlton Power is putting together its R&D budget for the coming year. The firm has compiled a list of potential research and development projects and estimated the interest rate and amount of financial capital required for various levels of R&D spending. The data collected is shown in the table below. Graph Knowlton Power's demand curve for financial capital when the firm receives only the private benefit of investing in R&D. Dprivate (in Dsocial (in Interest Point Rate millions) millions) A 14% $2 $3 B 12% $3 $5 10% $5 $7 D 8% $7 $9 E 6% $10 $14 Provide your answer below: (이2) (4, 2) (8, 2) (12, 2) (16, 2) 15 Financial capital (in millions $) 10 20 Rate of return (%)
Halloween, Inc., is considering a new product launch. The firm expects to have an annual operating cash flow of $9.6 million for the next 9 years. The discount rate for this project is 13 percent for new product launches. The initial investment is $39.6 million. Assume that the project has no salvage value at the end of its economic life. a. What is the NPV of the new product? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) b. After the first year, the project can be dismantled and sold for $26.6 million. If the estimates of remaining cash flows are revised based on the first year’s experience, at what level of expected cash flows does it make sense to abandon the project? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.)
With an MPC of 90, what would you expect to be the total impact on spending/incomes from the construction of a $4 million facility in a city? choose correct one- 1)$8 million 2)$40 million 3)$ 50 million 4)$10 million
Refer to the consumption function graph above. How much is the MPC at the disposable income of $200? Group of answer choices 0.75 cannot be determined -0.35 -0.3 -0.25 Expandius 600 500 430 400 115 330 300 240 230 200 100 0 100 200 000 G 400 500 600 4ping Line Dance
Question 5 A function g(z) is strictly increasing if g'(z) > 0 on its domain. Assume the supply and demand functions for a high-tech product are Qs = S(P), Qp = D(P +T,Y), %3D where Y is the income, T is the consumption tax on the product, and P is the price. We don't specify a particular analytical form of the supply and demand functions, but we assume that both functions are well defined on their domains and their derivatives exist. We also assume that S'(P) > 0 on its domain, and that D(Z,Y) > 0, D(Z,Y) < 0, and az where Z = P+T. Assume an equilibrium state exists in the sense that the supply and demand are balanced: S(P) – D(P +T,Y) = 0. (1) Assume Pis a function of Y. Is price (P) an increasing or decreasing function of income (Y)? Show your working steps to support your answer. (2) Assume Pis a function of T. Is price (P) an increasing or decreasing function of tax (T)? Show your working steps to support your answer.
economic Announcing in his Budget 2023 speech on Tuesday, Deputy Prime Minister and Finance Minister Lawrence Wong said cars with an OMV (the approximate cost of a car before taxes) higher than $80,000 will incur an additional registration fee (ARF, or the main car tax) of 320 per cent. The changes will take effect from the next round of certificate of entitlement (COE) bidding, which closes on Feb 22. Mr Wong said these changes are expected to affect the top one-third Do more research and apply what we have learned in “Demand & Supply”, “Elasticity” and “Taxation” to answer the following questions. 1. How does the ARF hike impact the luxury car market? Discuss the impact on the price and quantity of luxury cars (Use Demand and Supply graph to interpret your answer). 2. Mr Wong said the ARF hike was expected to affect the top one-third of cars and would generate about $200 million in additional revenue a year. Do you agree with his opinion? Apply the concept of elasticity to…
The builder of a new movie theater complex is trying to decide how many screens she wants. Below are her estimates of the number of patrons the complex will attract each year, depending on the number of screens available. Number of screens 1 2 3 4 5 2 After paying the movie distributors and meeting all other noninterest expenses, the owner expects to net $2 per ticket sold. Construction costs are $1,000,000 per screen. Instructions: Enter your responses as whole numbers. a. Make a table showing the value of marginal product for each screen from the first through the fifth Value of marginal product Humber of screens 1 $ 3 4 Total number of patrons 40,000 65,000 85,000 100,000 110,000 5 $ $ O Negative returns to capital O Increasing returns to capital O Diminishing returns to capital S m $ What property is illustrated by the behavior of marginal products? b. How many screens will be built if the real interest rate is 5.5 percent?
Based on the following information: The investment cost is paid in full in quarter 0, and the cost of the factory is 100000 while the cost of the research is also 100000. The factory has a lifetime of 20 quarters (5 years) and the value of the factory at the end of quarter 20 is 0 Only green jetpacks should be produced at the factory throughout its lifetime. There is no investment in research to streamline production or material consumption. Suppose the quarterly demand in the market is constant and given at P = 338 - 0.018 * Q, where P is price and Q is the number of jetpacks in demand. Assume P is 248 USD and Q is 5000. There are 5 competitors in the market (including you), and all sell the same number of jetpacks each quarter at the price of 248 each. You produce as much as you sell. The costs associated with the quarterly production at the factory are given at K = 178 * Q + 20000, where 178 * Q is direct labor cost and materials, and 20000 is quarterly maintenance cost when Q is…
Prove that the multiplier is equal to 1/(1-mpc)
Econ 301 Assignment #3: Due Date January 18, 2021 Name: Due date Friday If P1 = $2, and Qi = 10; P2 = $2.20 and Q2 = 8 %3D %3D In class, I showed you to use the midpoint formula, to calculate the price elasticity of demand from 1 to 2. This assignment I want you to calculate the price elasticity of demand from 2 to 1 using the midpoint formula.
Question Eleven Sharp Inc., a wholly Ghanaian owned company specializes in the production of hand sanitizers branded as Quin. The company has branches in all the regions in Ghana with its head office located at Cape Coast. It employs 1,200 people and pays an average of GH¢ 550.00 as income tax to the govemment of Ghana on a monthly basis. Suppose that seven thousand, eight hundred and twenty (7,820) units of Quin are produced and supplied by Sharp Inc. but the quantity demanded for Quin is eight thousand (8,000) units. Ceteris Paribus, a GH¢ 20.00 change in the price of Quin results in a change in quantity demanded for and supplied of 4 and 5 units, Ay respectively. [Hint: change in X due to change in Y is given as ax ]. Given the above information: a) Determine the equilibrium price and equilibrium quantities of Quin. b) Suppose the Govemment of Ghana in the wake of the COVID-19 pandemic grants a subsidy of GHs 4.50 on each Quin produced. Compute the new equilibrium price and…