Q: Assume the inflation rate is 4% per year and the market interest rate is 5% above the inflation…
A: The future value of a sum of money refers to its value in the future based on its value at present…
Q: The small country of Nederland counts its unemployed using the same methods as the United States.…
A: “Since you have posted multiple questions with multiple sub parts, we will provide the solution only…
Q: Critically analyse how happiness is related to economic development
A: The process through which a country's economy expands and strengthens over time with the aim of…
Q: Arif and Aisha agree to meet for a date at a local dance club next week. In their enthusiasm, they…
A: Nash equilibrium refers to a concept in game theory that describes a state of a game where no player…
Q: g) How many firms are in the industry in the short-run?
A: The two basic economic concepts that affect business decisions and results are production and cost.…
Q: A truck was purchased four years ago for $65,000 to move raw materials and finished goods between a…
A: MARR=10% Defender sold at 0 year=$40000 The initial cost of challenger=68000
Q: 3. (a) Consider a standard Hecksher-Ohlin world, with the following endowment of production factors:…
A: A production possibilities frontier (PPF) is a graphical representation of the maximum amount of…
Q: Standard tickets for Beyonce’s Renaissance tour went on sale in the UK for a price of £56 in…
A: Demand is a desire backed by purchasing power. When a person is willing and able to buy a product…
Q: The classical dichotomy is the separation of real and nominal variables. The following questions…
A: Nominal variables are measured in monetary terms. Real variables are measured in physical terms.…
Q: Using the IS-LM graph as well as the related equations and assuming an open economy with flexible…
A: IS curve: IS curve shows different combinations of interest rate and the income. Such that for each…
Q: Suppose the government applies a specific tax to a good where the demand elasticity, E, is -1.4, and…
A: Given that: Demand elasticity = -1.4 Supply elasticity = 1.2 The tax incidence depends on the…
Q: 3. The cartel of copper exporting countries is called COPEC. As part an international trade…
A: Price elasticity of demand is defined as the proportional change in demand due to proportional…
Q: How do market frictions, such as long online queues and error messages, affect the supply and demand…
A: Markets frictions, such as long online queues and error messages, can have significant effects on…
Q: W₁ W₂ W₂ 0 3 A. W₂ minus W3 B. W₁ minus W₂ L₁ L₂ L In the above figure, what is the difference…
A: When there is just one significant customer for a given commodity or service, this circumstance is…
Q: 14. The figure below presents information for a one-shot game. Firms B (8.10) What are dominant…
A: Nash equilibrium is the point of a game corresponding to which each participant optimizes his…
Q: The Bureau of Labor Statistics (BLS) adjusts the numbers from the household survey to estimate the…
A: Unemployment rate is a measure of the percentage of the total labor force that is unemployed but…
Q: A company purchased a machine last year for $150,000. Revenue for the first year was $50,000. Over…
A: When a fixed asset reaches the end of its useful life and can still be recovered through resale,…
Q: The following are the CPI values in Hong Kong for 2009 to 2014 (recorded in December): Year CPI 2009…
A: The Consumer Price Index, or CPI, is a gauge of the typical change in prices over time of a…
Q: What is the annual rate of interest if 232 is earned in 10 months on an investment of 14,198? *Use 4…
A: Interest earned= 232 Time period= 10 months Investment= 14,198 To find: annual rate of interest
Q: The table below shows revenue data for different firms producing refrigerators. Use the given…
A: Market share of a firm is the ratio of revenue generated by a firm to the revenue generated by the…
Q: The cartel of copper exporting countries is called COPEC. As part of an international trade…
A: Marginal revenue means to the change in total revenue resulting from producing one additional unit…
Q: Identify which restrictive practices are described in the following scenarios: A. Exclusive dealings…
A: Restrictive practices refer to the practice made by the sellers of a good or service related to…
Q: 3) The cartel of copper exporting countries is called COPEC. As part of an international trade…
A: Price elasticity of demand is a measure of how sensitive the quantity demanded of a good or service…
Q: A person buys a piece of lot for P 102,125 down payment and 14 deferred semi-annual payments of P…
A: Given Down payment for a piece of lot =102125 Number of Deferred semi-annual payments =14 The…
Q: This is a standard of antitrus the allegedly anti-competitiv competitive or anti-competi O Per Se…
A: An anti-competitive effect refers to the negative impact that a particular business practice or…
Q: (a) Q1: Examine the data in the Table below and determine the lifetime costs of this hybrid vehicle.…
A: To determine the lifetime costs of this hybrid vehicle, we need to consider both the purchase cost…
Q: Price 21 20 19 18 17 6543 16 15 14 13 12 11 HO9BTSASTO 10 8 7 6 5 4 3 2 1 0 ABCD ●● Marginal cost…
A:
Q: The largest few firms in the market for desks are listed below, along with their Market Share. What…
A: 4 firm concentration ratio is calculated as the sum of market share of all the big 4 firms divided…
Q: This question is about monetary policy tools and tactics: a. Imagine a monetary system with just two…
A: The required reserve ratio of a bank depicts the minimum amount of deposits a bank must keep as…
Q: 1. Explain each of the following in one sentence. (a) Stolper-Samuelson theorem. (b) Rybczynski…
A: Countries have different opportunity costs in producing the same goods. Therefore, each country has…
Q: Discuss the three-legged-stool approach of Massachusetts's experiment with incremental universalism.…
A: Incremental universalism is an approach to achieving universal healthcare coverage by implementing…
Q: What are some potential solutions to the market frictions and inefficiencies that arise in the…
A: Beyonce Giselle Knowles-Carter is a song writer, singer and a dancer.
Q: In the product market there is a situation of sophisticated competition. The firm signed a contract…
A: Total revenue refers to the revenue a firm generates from operations or sales at different levels of…
Q: How much is 15,187 PhP worth after 9 years if it is deposited in a bank whose nominal rate of…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: Assume a Hawk -Dove game with the following payoff matrix, where the first entry is Animal A's…
A: Nash equilibrium is the point of a game corresponding to which each participant optimizes his…
Q: Price $100 90 80 70 60 50 40 1 2 3 4 5 6 7 Average Total Cost $100 63 52.67 49.50 49.60 50 52.29 2 =…
A: Monopoly is a market structure where there is a single firm producing a product. Because of the…
Q: Should the competition commission litigate against firms who have a dominant market position?
A: A dominant market position refers to a situation where a single firm or a group of firms in an…
Q: Three mutually exclusive earth-moving pieces of equipment are being considered for several large…
A: The annual worth method of alternative selection does not need that all alternatives should have the…
Q: Under-capitalization of a business entity causes: a) a situation when current assets are financed…
A: Under-capitalization can have several unfortunate results for a business element. For instance, it…
Q: Which of the following statements is/are true? 1. In Wakanda, nominal GDP equals 24 000 Wakandan…
A: Money is a vital component in modern economies, serving as an instrument of value, an item of…
Q: An individual's current income is $50,000 the person expects next period (future) income to be…
A: The budget constraint is the locus of all affordable consumption bundles at the given income of the…
Q: 6. Consider the following economy: C = 100+0.8Y, I = 200, G = 125, NX = 75. (a) Compute the…
A: GDP is the value of final goods and services produced in the economy within a given period of time.
Q: A country’s money supply growth is 3%. The growth rate of real GDP equals 5%. Using a quantitative…
A: Quantity Theory of Money states that the general price level of goods and services in the economy is…
Q: 2. (a) A monopolist has discovered that the inverse demand function of a person with income Y for…
A: Monopoly is a market structure where there is only a single seller or firm. Since, there are ni…
Q: Evaluate at least four ways why the education of women is considered the most cost-effective form of…
A: Human capital refers to the knowledge, skills, abilities, and other intangible qualities possessed…
Q: FRED Percent 17.5 15.0 12.5 10.0 7.5 5.0 2.5 1960 Unemployment Rate - Men Unemployment Rate…
A: The unemployment rate is a measure that quantifies the proportion of the labor force that is…
Q: In the specific factors model, labour is defined as a as a specific factor. a. variable factor;…
A: Specific factor model determines how different factors of production are used in different…
Q: Priyanka has an income of £90,000 and is a von Neumann-Morgenstern expected utility maximiser with…
A: Expected utility is a concept in decision theory that helps individuals make rational choices under…
Q: Using marginal analysis, how does a firm find its optimal output?
A: Total revenue refers to the revenue a firm generates from operations or sales at different levels of…
Q: The depreciation rate of capital in the US is 8 = 0.043 and the population growth rate is g₁ =…
A: ? = 0.043, gL = 0.007, Y/K = 0.35, and s = 0.2,
1.
A. State the condition for the Pareto optimal provision of a public good. Interpret the condition.
B. Consider agent A with (inverse) demand curve for the public good and agent B with inverse demand , where prices are measured in £ per unit. The marginal cost of producing the public good is £10 per unit. What is the Pareto efficient level of the public good? Explain. Illustrate in a graph. [Hint: Compute the marginal social benefit of the public good by adding up the demand curves vertically, over the p’s]
Step by step
Solved in 3 steps
- 1. a) State the condition for the Pareto optimal provision of a public good. Interpret the condition. b) Consider agent A with (inverse) demand curve for the public good and agent B with inverse demand , where prices are measured in £ per unit. The marginal cost of producing the public good is £10 per unit. What is the Pareto efficient level of the public good? Explain. Illustrate in a graph. [Hint: Compute the marginal social benefit of the public good by adding up the demand curves vertically, over the p’s] c) Describe the Vickrey-Clarke-Groves (VCG) Mechanism, provide examples and discuss problems with the VCG mechanism.b) Consider agent A with (inverse) demand curve for the public good and agent B with inverse demand , where prices are measured in £ per unit. The marginal cost of producing the public good is £10 per unit. What is the Pareto efficient level of the public good? Explain. Illustrate in a graph. [Hint: Compute the marginal social benefit of the public good by adding up the demand curves vertically, over the p’s]A Consider agent A with (inverse) demand curve for the public good P₁ = 60 - 2QA and agent B with inverse demand PB = 90 - 5QB, where prices are measured in £ per unit. The marginal cost of producing the public good is £10 per unit. What is the Pareto efficient level of the public good? Explain. Illustrate in a graph. [Hint: Compute the marginal social benefit of the public good by adding up the demand curves vertically, over the p's]
- Suppose there are three consumers of a public good with the following marginal benefits of consumption related to the quantity of the public good provided: Consumer 1: MB1 = 5 – 2Q Consumer 2: MB2 = 4 – Q Consumer 3: MB3 = 3 – Q Calculate and draw the total marginal benefit function of the public good in a fully labelled diagram. If the marginal cost of producing the public good is MC = 2Q, what is the efficient quantity and how much should each consumer contribute to its provision if it were to provided at the efficient level (assuming the non-rival and non-excludable problems could be resolved)?b) Consider agent A with (inverse) demand curve for the public good PA = 60 - 2QA and agent B with inverse demand PB = 90 - 5QB, where prices are measured in £ per unit. The marginal cost of producing the public good is £10 per unit. What is the Pareto efficient level of the public good? Explain. Illustrate in a graph. [Hint: Compute the marginal social benefit of the public good by adding up the demand curves vertically, over the p's]a) State the condition for the Pareto optimal provision of a public good. Interpret the condition. b) Consider agent A with (inverse) demand curve for the public good PA = 60 - 2Q and agent B with inverse demand PR = 90 - 5QR, where prices are measured in £ per unit. The marginal cost of producing the public good is £10 per unit. What is the Pareto efficient level of the public good? Explain. Illustrate in a graph. [Hint: Compute the marginal social benefit of the public good by adding up the demand curves vertically, over the p's] c) Describe the Vickrey-Clarke-Groves (VCG) Mechanism, provide examples and discuss problems with the VCG mechanism.
- Consider agent A with (inverse) demand curve for the public good PA = 60 − 2QA and agent B with inverse demand PB = 90 − 5QB, where prices are measured in £ per unit. The marginal cost of producing the public good is £10 per unit. What is the Pareto efficient level of the public good? Explain. Illustrate in a graph. [Hint: Compute the marginal social benefit of the public good by adding up the demand curves vertically, over the p’s]a) State the condition for the Pareto optimal provision of a public good. Interpret the condition. B b) Consider agent A with (inverse) demand curve for the public good P₁ = 60 - 2Q and agent B with inverse demand PR = 90 - 5QB, where prices are measured in £ per unit. The marginal cost of producing the public good is £10 per unit. What is the Pareto efficient level of the public good? Explain. Illustrate in a graph. [Hint: Compute the marginal social benefit of the public good by adding up the demand curves vertically, over the p's] c) Describe the Vickrey-Clarke-Groves (VCG) Mechanism, provide examples and discuss problems with the VCG mechanism.Consider agent A with (inverse) demand curve for the public good and agent B with inverse demand , where prices are measured in £ per unit. The marginal cost of producing the public good is £10 per unit. What is the Pareto efficient level of the public good? Explain. Illustrate in a graph. [Hint: Compute the marginal social benefit of the public good by adding up the demand curves vertically, over the p’s - image attached that has the inverse demand function
- Practice: Suppose that are two people considering purchasing a public good. For each quantity purchased(Q), each individual gains a marginal benefit given by the following: Person 1:MB-12-Q. Person 2:MB2-24-2Q. The Marginal Cost of each unit of Qis given by MC-2Q Given the above, answer the following questions: a) If each person had to buy their own quantity of the public good how much would each person want to purchase? How much would end up being purchased privately? Q together b) Write down the Social Marginal Benefit Curve. What is the socially optimal equilibrium quantity? Now suppose for Part c that we are at the private market equilibrium. which is your answer from Part a. The government wants to step in and tax each of these individuals and use the raised revenue to purchase another unit of this good. Each individual can be taxed a different amount c) Propose a tax that will both (i) allow enough money to be raised for this additional unit of the public good and (ii) will make…Use the following diagram in which S is the market supply curve and S, is a supply curve comprising all costs of production, including external costs, to answer the question below. Price Quantity Assume that the number of people affected by these external costs is large. Without government interference, this market will reach a(n) A) higher price than is consistent with an optimal allocation of resources. B) optimal allocation of society's resources. C) overallocation of resources to this product. OD) underallocation of resources to this product.This problem uses the 'wedge' approach in a supply and demand diagram to show the effect of a tax. The government is considering levying a tax of €20 per unit on either carbon emissions or car batteries. The supply curve for each of these goods is identical and is shown by S. The demand for carbon emissions is shown by D1, and the demand for car batteries is shown by D2. Assume the government were to tax carbon emissions. The following graph shows the supply and demand for this good. The graph also shows a wedge representing the tax. Use the tan triangle (dash symbols) to shade the area that represents the deadweight loss associated with the tax.
