FINAL EXAM
NAME (PLEASE PRINT)
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Part 1: 25 multiple-choice questions
Part 2:
Note: Show all formulae and work.
1. How
much would you pay for the right to receive $1000 per year for 10 years if 8%
reflects your time preference? Show
formula and all work.
2.
An advocate of state regulation of cosmetologists and barbers in
Washington State argued that the state cosmetology agency had taken in $756,805
in revenue in the preceding year while only costing $589,014 in expenses, thus
providing a net benefit to the state.
Where would you look to locate some additional costs created by the
agency? Explain.
3.
Use a graph to show a price
searching firm enjoying pure profits.
Label MR, AR, MC, Demand and Supply Curves. Identify the area representing pure profits.
4. Is it rational for firms to discriminate based on gender or
race? Graph and explain.
5. What is the optimal
level of pollution? Graph and explain.