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Provide a graphical two-commodity example of a preference relation generating an income elasticity of the demand for public good that is greater than one.
What restricts the policies that a government can choose? Are there any arguments for imposing additional restrictions?
Which is the norm in the United States, affects total labor costs differently from health insurance. What kinds of industries are likely to be most affected?
Health care costs are affected by information asymmetry since the provider is generally. What kinds of policy changes might help to address that problem?
Consumer 1 obtains no pleasure from good 1, and consumer 2 obtains no pleasure from good 2. Draw the preferences of the consumers in an Edge worth box.
How would you model the discovery? Discuss the number of goods that should be included in the model.
Keynesian models in macroeconomics are identified by the assumption of a fixed price for output. Are such models partial or general equilibrium?
Distinguish between partial equilibrium analysis and general equilibrium analysis. Briefly describe a model of each kind.
What proportion of the world's economies (by number, population, and wealth) can be described as mixed?
If the European Union considered replacing the income tax with an increase in VAT, would you model this using partial equilibrium?
To analyze the effect of a subsidy to rice production, would you employ a partial equilibrium or a general equilibrium model?
Can an economic model be acceptable if it assumes that consumers solve computationally complex maximization problems?
Plot the possible shares that the two people can have. What allocation of shares would you choose? How would your answer change if y = [1 - x ]4?
High income earners should pay a high rate of tax because their labor supply. Distinguish between the positive and normative components of this statement.
You are invited by two friends to resolve a dispute about the shared use of a car. By applying Pareto-eciency, what are you able to advise them?
The box contains ten milk chocolates and ten plain chocolates. Neither child likes plain chocolates. Describe the Paretoecient allocations.
What is the consumption level of the consumer in such a case? Provide an interpretation of this possibility.
How can the existence of fixed costs be incorporated into the production set diagram? After paying its fixed costs a firm has constant returns to scale.
If the price of good 1 is 1, at what price for good 2 will the firm just break even? Graph the firm's profit as a function of the price of good 2.
What are the advantages and disadvantages of vouchers as a method of improving equity and school quality?
What kinds of challenges exist in this kind of grants that are not a problem for grants within a country?
Project grants, based on competitive applications, implicitly assume that all competing state. How might the grants be designed to level the playing field?
Using data from the US Bureau of the Census, graph the intergovernmental grants to state and local governments and the grants. What pattern do you see?
Under what circumstances might they be preferred on equity or efficiency grounds to taxes on emissions or regulatory approaches?
How are the effects different from those of a simple matching grant? Does it depend on the size of the maximum?