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In equilibrium how will the price of a unit of energy compare with the price of a unit of food?
Draw the Edgeworth box that shows the set of feasible allocations that are available in this simple economy.
Do the current production baskets satisfy the condition of input efficiency? If not, describe an exchange of inputs that would improve efficiency.
What is the marginal rate of transformation of x for y? How much clothing must the economy give up in order to get one additional unit of food?
what must be the marginal product of labor in producing clothing and the marginal rate of transformation of food for clothing?
How might an emissions standard lead to an efficient level of output in a market with a negative externality?
How does a nonrival good differ from a nonexclusive good? What is the Coase Theorem, and when is it likely to be helpful in leading a market with externalities?
When do externalities require government intervention, and when is such intervention unlikely to be necessary?
What is a public good? How can one determine the optimal level of provision of a public good?
Education is often described as a good with positive externalities. Explain how education might generate positive external benefits.
How would you evaluate a proposal to ban cigarette smoking? Would a ban on smoking necessarily be economically efficient?
How much of the chemical should the market supply at the social optimum? How large is the deadweight loss from the externality?
Find the equilibrium price and quantity in a market with no government intervention. Find the socially optimal quantity of the good.
Find the level of the tax, T, that ensures the socially optimal amount of widgets will be produced in a competitive equilibrium.
What is the most the household would be willing to pay for this insurance policy? How does your answer relate to concept of risk premium discussed in the text?
If your utility function has the formula 100I - 0.0001I2, determine the risk premium associated with this lottery.
You have a utility function given by U = 10 lnI. where I represents the monetary payoff from an investment. What is the risk premium for this lottery?
Sketch this utility function. What is the expected value of each lottery? Which lottery do you prefer? Are you risk averse, risk neutral, or risk loving?
Write down the equation of a utility function that corresponds to a risk-neutral decision maker.
Consider two lotteries. The outcome of each lottery is the same: 1, 2, 3, 4, 5, or 6. In the first lottery each outcome. Which lottery has the higher variance?
Compute the expected value and variance of this lottery. Why does the second lottery have a smaller variance?
Describe the person so the reader has a dominant impression of him or her. Work in quotes from your subject as necessary.
How would you value the goodwill that is obtained in this way?
You are asked by a local newspaper to outline a formula for making your local government "better and cheaper" for its citizens.
Based on the country (or countries) you are analyzing for your global business enterprise, research information related to the following areas