Homework # 5 (1).pdf - BOSTON COLLEGE Department of...

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BOSTON COLLEGEDepartment of EconomicsECON 2209Prof. KonanSports EconomicsHomework # 5TOTAL: 100 points1.Suppose the demand for toothbrushes isQd= 3,000 - .4P. The market supply curve isQs4P. What would be the deadweight loss associated with a $0.20 tax on toothbrushes? Basedon the Ramsey rule, would this be a good product to tax or not?Explain2.Suppose New York wants to build a new facility to replace Madison Square Garden. Assumethat the cost of building a new arena in midtown Manhattan is $2.5 billion and that all thecosts occur right away. Also assume that New York will receive annual benefits of $110million for the next25 years, after which the new arena becomes worthless. Does it make financial sense to buildthe new facility if interest rates are 6 percent? At what interest rate will we be indifferentbetween accepting and rejecting this project?Make sure to show your work3.Based on the following player statistics, compute the Wins Score values. Assuming the=..

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