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soldi70 [24.7K]
3 years ago
6

In the simplified model with proportional taxation introduced at the end of chapter 5, there can be two equilibria, one with a h

igh tax rate and one with a low tax rate. Now, suppose that government spending increases. Determine the effects of an increase in G on consumption, leisure, labor supply, real output, and the tax rate in a high-tax-rate equilibrium and in a low-tax-rate equilibrium. How do your results differ? Explain why.
Business
1 answer:
Radda [10]3 years ago
3 0

Answer:

answer is given below

Explanation:

Equilibria with high tax rate.

  • In the high balance tax system, taxes are already high. Make government spending and revenue sources mandatory. and Tax rates decrease.
  • The income effect leads to an increase in both consumption and leisure, but when the alternative effect is taken into account, higher costs lead to greater employment and greater consumption but leave the party on leave.
  • Tax base witnesses grow. Output increases but relaxation decreases.

Equilibria with low tax rate:

  • An increase in government spending leads to an increase in tax rates to increase income sources.
  • The increase in taxes leads to a decline in consumption and production.
  • Therefore, the amount of time spent at rest will increase.
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Suppose Stark Ltd. just issued a dividend of $2.24 per share on its common stock. The company paid dividends of $1.80, $1.98, $2
Sergeu [11.5K]

Answer:

Ans, The cost of the company’s cost of equity capital using the arithmetic average growth rate is 10.63% and using the geometric average of the growth rate is 10.60%

Explanation:

Hi, this is the equation we need to solve in order to find the company’s cost of equity capital.

r=\frac{Dividend}{Price} +g

As you can see, we almost have everything, the only problem here is "g", its growth rate, so let´s find "g" using the arithmetic average, but first, we need to find the growth rate for every period, the formula is

g=\frac{(FinalDividend-PastDividend}{PastDividend}

Therefore, we need to find 4 g´s, let´s call them g1, g2, g3 and g4:

g1=\frac{(1.98-1.80)}{1.80} =0.10

g2=\frac{(2.05-1.98)}{1.98} =0.0354

g3=\frac{(2.16-2.05)}{2.05} =0.0537

g4=\frac{(2.24-2.16)}{2.16} =0.0370

So the average is:

Average(g)=\frac{0.10+0.0354+0.0537+0.0370}{4} =0.0565

Therefore, the average growth rate is 5.65%

And the company’s cost of equity is:

r=\frac{2.24}{45} +0.0565=0.1063

so, if the average growth rate is found by using the arithmetic average is 10.63%.

Now, let´s find the geometric average

g(average)=\sqrt[4]{(1+0.10)(1+0.0354)(1+0.0537)(1+0.0370)} -1=0.0562

therefore, using the geometric average to find the growth rate, the company’s cost of equity is:

r=\frac{2.24}{45} +0.0562=0.1060

using the geometric average, the company’s cost of equity is 10.60%

Best of luck.

7 0
3 years ago
Outpuit AFC AVC ATC MC 1 $300 $100 $400 $100 2 150 75 225 50 3 100 70 170 60 4 75 73 148 80 5 60 80 140 110 6 50 90 140 140 7 43
Simora [160]

Answer:

The answer is $119

Explanation:

Solution:

The firm is working in a competitive market that is seen as perfect.

Thus,

The profit the condition for maximizing profit is given below:

P = MR =MC

Now,

The market price of the product is =$290

So,

P = $290

From the given table, we noticed that the profit maximizing output level is 9 units when P = MC

The profit (π) = total revenue - cost total

= ( P * Q) - ( ATC * Q)

= 290 * 9 - 171 * 9

= 2610 - 1539

= 1071

Therefore, the per-unit economic profit at the profit-maximizing output is

=$1071/9

=$119

7 0
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MArishka [77]

Answer:

c. ethnographic

Explanation:

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sertanlavr [38]

Answer:

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Based on the information provided within the question it can be said that in this scenario you should preoxygenate him with a bag-mask device and then perform blind nasotracheal intubation. This is the process of placing oxygen tubes into the individuals nasal track and down the throat to allow better airflow.

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