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1. What are externalities? Give an example of positive and negative externality and explain why the market outcomes are inefficient in the presence of externalities? 2. What are
A film studio in Hollywood produces movies according to the function q = F(K;L) = (2=100)K^0.5L^0.5 In the short run, capital (studios, gear) is xed at a level of 100. It costs $
Private and Social Benefits Private benefits are those which accrue to an individual. They may be both monetary and non monetary, direct and indirect. Earnings of an individua
What is the distinguishes a progressive income tax, from a proportional income tax, or a regressive income tax? A proportional income tax takes the similar percentage of a pe
using necessary and sufficient condition explain consumer surplus diagrammically and mathematically?
Describe Dalton''s law of partial pressures, specification of Dalton''s law of partial pressures, Dalton''s law states that, at a given known temperature total pressure exerted b
LONG PERIOD ANALYSIS: Long period refers to a time when all the factors are variable. Earlier in the short period analysis, we had considered capital (K) to be fixed factor. H
The distinction between supply and the quantity supplied is best made by saying that
What is the difference between wages and salaries
Principle Agent Problem [Dealing with hidden action] Assume that the employer (principle) wants its employee (agent) to work hard [You can safely assume that this maximizes th
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