Category: Economics

The federal government issued one-time tax rebates-checks returning a small portion of taxes previously paid-to millions of Canadian residents, and Canadian real disposable income temporarily jumped by nearly $500 billion. However, household real consumption spending did not increase in response to the short-lived increase in real disposable income because
A. the one-time tax rebate failed to increase the recipients’ permanent income which determines an individual’s current consumption.
B. there is a considerable lag between an increase in disposable income and an increase in current consumption.
C. the size of the tax rebate was too small
D. tax cuts or tax rebates have no effect on consumption.
Which of the following economic theories can be used to account for this apparent non-relationship between real consumption and real disposable income?
A. the Ricardian equivalence theorem
B. supply-side economics
C. the permanent income hypothesis
D. direct expenditure offsets

Question content area Part 1 Suppose a professional basketball game is to be played at a suburban arena, which increases demand for parking on the night of the game.
Part 2 If the suburban area has the ability to create additional parking during periods of peak demand, then
A. the supply of parking will be more elastic and the price of parking will increase by a relatively large amount the night of the game.
B. the supply of parking will be perfectly elastic and the price of parking will increase by a relatively large amount the night of the game.
C. the supply of parking will be more inelastic and the price of parking will increase by a relatively small amount the night of the game.
D. the supply of parking will be more elastic and the price of parking will increase by a relatively small amount the night of the game.
E. the supply of parking will be more inelastic and the price of parking will not change the night of the game.

An injection molding system has a first cost of R1,500,000, and an annualoperating cost of R740,000 in years 1 and 2, increasing by R50,000 per yearthereafter. The salvage value of the system is 35% of the first cost regardlessof when the system is retired within its maximum useful life of 5 years. TheAnnual Worth Values for the 5 years of useful life were calculated by a colleague before he had to leave for urgent customer business.
The values he calculated were:
AW1=-R1,940,000
AW2=-R1,418,492
AW3=-R1,260,176
AW4=-R1,191,822
AW5=-R1,114,483
Accepting the calculation as correct, what is the Economic Service Life (ESL) of the system? Select the correct answer from the options below:
a. The ESL is AW5=-R1,114,483
b. The ESL is 1 year
c. The ESL is AW4=-R1,191,822
d. The ESL is 2 years
e. The ESL is AW3=-R1,260,176
F. The ESL is 3 years
g. The ESL is AW2=-R1,418,492
h. The ESL is 4 years
i. The ESL is AW1=-R1,940,000
j. The ESL is 5 years
k. None of these values

Cement exports from the U.S. into Canada are valued at roughly $119M annually. Cementimports to the U.S. from Canada are valued at roughly $542M annually. Cement production is a highlycarbon intensive process. Suppose the U.S. government must decide whether to impose a carbon tax onthe domestic (U.S.) cement production. One concern is “leakage.” A second concern is the potential toreduce the competitiveness of U.S. cement producers.Answer the following questions. Where applicable make sure to use a supply/demand market model tosupport and demonstrate your results.
(a) (1) How will a unilateral tax on domestic cement production affect the welfare of domesticconsumers and producers?
(b) (1) How does the leakage problem undermine the goal of reducing global carbon emissions fromcement production?
(c) (1.5) How might a border carbon adjustment tariff policy remedy the leakage problem?
(d) (1.5) How would a domestic producer subsidy remedy the government’s anti-competitivenessconcerns

Your friend points to the wages earned by your economics professor and her teaching assistant (TA) as an example of income inequality.
Your tenured professor earns $120,800, drives a BMW, and vacations in Europe, whereas your TA earns $10,100 per year, rides a bike, and vacations at his mom’s house. Because they both teach for a living, your friend argues that this income inequality is not just. Which reply uses the economic life-cycle to respond to your friend’s arguments?
Your professor and TA earn different amounts now but they will have similar earnings over the course of their lives. Your professor was once a TA, and your TA will one day make better money.
Your professor has more bargaining power than your TA and, therefore, has higher earnings.
Older workers typically have more expenses than younger workers due to the high cost of healthcare and other costs that occur later in the life cycle. The differences in wages occur because older workers need more money than younger workers.