A3, Microeconomics

Assignment Help:
Consider the model of corruption explored by Shleifer and Vishni’s where there is one government-produced good X. There is a demand for that good described by the inverse demand equation Qd = 10 – P. The official government price for the good is Pg=3. The government pays the cost of producing the good. A bureaucrat can restrict the supply of X. The fact that there are no risks of detection gives this public official incentives to ask for a bribe to supply the good. Consider the model of “no theft” where the consumer pays the official government price plus a bribe in order to obtain X. Assume that the official marginal revenue for selling the good in this context is given by Qc=(7/2) – (1/2)P.
In the model of “no theft” what is the amount of the bribe that the corrupt official will charge??

Related Discussions:- A3

Competitive firm, The Competitive Firm - Price taker - Market ou...

The Competitive Firm - Price taker - Market output (Q) and firm output (q) - Market demand (D) and firm demand (d) - R(q) is straight line Demand and Marginal Re

Fluctuations in growth rates - estimation of national income, Fluctuations ...

Fluctuations in Growth Rates: Fluctuations in year-to-year growth rates in early stages were very marked, which indicated that the economy had failed to create conditions cond

Employee ownership stock plan (esop), A trust is build to acquire shares in...

A trust is build to acquire shares in organizations for subsequent allocation to employees over time by time.

Determine the dividend yield and current stock price, The Bloomington Elect...

The Bloomington Electric Company operates in a stable industry and therefore has predictable dividend growth of 8% per year. The most recent annual dividend was paid yesterday in t

How is microeconomics differed from macroeconomics, How is microeconomics d...

How is microeconomics differed from macroeconomics? Microeconomics focuses onto how decisions are made through individuals and firms and the effects of those decisions. For exa

Consumer behaviour, compare and contrast between cordinal and ordinal appr...

compare and contrast between cordinal and ordinal approaches

Production possibilities curves, What are the most important challenges tha...

What are the most important challenges that economists try to address? (ii) What is the role of government in a market based economy? (iii) Who are the main economic players and w

Illustrate the features of a perfectly competitive firm, Question 1: (a...

Question 1: (a) Clearly illustrate the features of a perfectly competitive firm. (b) How would the same industry change if it were organized first as a competitive industr

Rational decision, what is rational decision and why it requires one''s cho...

what is rational decision and why it requires one''s choices be consistent with one''s goals?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd