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Let there be two identical consumers. What would be the share of the cost each should pay for a public good at the Lindahl equilibrium?
Consider four student deciding to jointly share a textbook. Describe a practical method for using the Lindahl equilibrium to determine how much each should pay.
How do prices ensure that the eminency condition is satisfied for private goods? Why the same not true when is there is a public good?
Smoke from a factory dirties the local housing and poisons crops. Identify the nature of the externalities in this statement.
What does the Tiebout hypothesis suggest for the organization of a city's structure? The response should include a reference list.
Let U = 40n - 2n2. Find the optimal club membership n. Graph the value of U against population size N when the population is divided between 1 club.
what is the smallest population beyond which eminency is always achieved? What if the optimal size is between 3 and 4?
Explain why the economy will be closer to an ancient equilibrium when congestion occurs with a small membership level.
Find the optimal membership of the club. What is the membership level that maximizes the total utility of the club? Contrast two levels and explain difference.
How does the design of two-part tarsi have to be modified when consumers are heterogeneous?
How can a monopolist employ a two-part tare to extract consumer surplus? Is the outcome ancient?
Theme parks do not use two-part tarries. What is the consequence? Why do they choose not to use two-part tarries?
Discuss whether provision of state education enhances eminency or equity. What about health care?
If it takes four days of labor to produce a week's food, and one day of labor to steal a week's food, what will be the equilibrium outcome?
Do increases in public expenditure cause an increase in national income, or vice versa? How would you test which is the case?
Why Does the division of political responsibility among different levels of government have any economic implications?
In the 1980s both the United Kingdom and the United States had governments that aimed to cut expenditure. Why could any government now cut expenditure?
Why may expenditure data underestimate the influence of the public sector upon the economy?
What factors might have been responsible for the growth of government expenditure between 1920 and 1940?
What value maximizes revenue per member of the profession? If the benefit from the profession is vn, what is the ancient membership?
How can right-wing and left-wing governments be modeled using the budget-setting framework?
Why might it be better to tolerate bureaus of excessive size rather than permit bureaucrats to seek rewards in cash?
Describe the benefits a bureaucrat can obtain from an increase in bureau size. Are there any private costs?
Assess the answer relative to the arguments of the development model. Do the data describe a relation of demand to income that supports Wagner's law?
Give a graphical illustration of a preference relation generating a price elasticity of demand for public good that is less than one in absolute value.