1.Suppose you expect to receive a $10,000 bonus from your employer in two years upon completing your college degree. If the interest rate is 5%, what is the present value of the $10,000? 2. The Table below shows the prices and supply and demand for flu shots in millions. Not taking into account the benefits from flu shots, what are the equilibrium price and quantity from flu shots? Now suppose that every flu shot generates $10.00 in external benefits (from others being likely to get sick). Show how this positive externality affect the curve (draw a new curve on the graph). Taking into account external benefits, what would be the new equilibrium price and quantity of the flu shot? Price ( in $) Demand , Flu shots (in millions) Supply, Flu Shots( in millions) 10 8.0 2.0 20 4.0 6.5 30 3.5 3.5 40 4.5 6.5 50 3.0 7.0 60 2.0 8.0

1.Suppose you expect to receive a $10,000 bonus from your employer in two years upon completing your college degree. If the interest rate is 5%, what is the present value of the $10,000? 2. The Table below shows the prices and supply and demand for flu shots in millions. Not taking into account the benefits from flu shots, what are the equilibrium price and quantity from flu shots? Now suppose that every flu shot generates $10.00 in external benefits (from others being likely to get sick). Show how this positive externality affect the curve (draw a new curve on the graph). Taking into account external benefits, what would be the new equilibrium price and quantity of the flu shot? Price ( in $) Demand , Flu shots (in millions) Supply, Flu Shots( in millions) 10 8.0 2.0 20 4.0 6.5 30 3.5 3.5 40 4.5 6.5 50 3.0 7.0 60 2.0 8.0

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 11PA

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