Advantages of leaving resource allocation, Macroeconomics

Assignment Help:

What are the advantages of leaving resource allocation to price allocation?

Ans) The 5 benefits are Neutral, Flexible, Freedom of choice, No administrative cost and lastly Diminished incentives. Distinguish among diminishing returns and diseconomies of scale. Diseconomies of scale I guess means as you make more it becomes more costly to produce.

For example, you make output 1 for $2 but output 2 for $5 thus the second one needed $3

Now let us say input for output 1 had to be doubled for input 2. One land gave output 1. Output 2 required 2 lands. Then there are not diminishing returns.

Though, as second land was costing $3 there was diseconomies of scale.

 


Related Discussions:- Advantages of leaving resource allocation

Trade in services, TRADE IN SERVICES: India had objected to  the  incl...

TRADE IN SERVICES: India had objected to  the  inclusion of  trade in services  in  the agreement for  the UR  negotiations. The  Indian negotiations continued to raise object

Value to change expect the market, You just inherited a house with a market...

You just inherited a house with a market value of $300,000, and do not expect the market value to change. Each year, you will pay $1,000 for utilities and $3,000 in taxes. You can

Components in the costs of health care services, What are the key component...

What are the key components in the costs of health care services?

Elucidate elasticity of supply using the midpoint formula, An attorney supp...

An attorney supplies 40 hours of work per week when her fee is $100 per hour but supplies 60 hours of work per week when her fee rises to $120 per hour. Using the midpoint formula,

Demand for money, what is the meaning of the statement ''money is not merel...

what is the meaning of the statement ''money is not merely a veil or wrapper''?

Aggregate supply and the as curve, Aggregate supply and the AS curve ...

Aggregate supply and the AS curve The AS curve is the aggregate supply as a function of P. It is horizontal when thesupply is low and upward sloping when the s

Enumerate the statement- interest rates with longer maturity, Enumerate the...

Enumerate the statement- Interest rates with longer maturity Since loans with longer maturities are substitutes for overnight loans, the central bank also has some control o

Lilie, What are the requirements for something to be considered money? Why ...

What are the requirements for something to be considered money? Why does the dollar have value?

When patulin molds can occur, Occurrence: It is found in a range of foods b...

Occurrence: It is found in a range of foods based on fruits. Presence of patulin in fruit juice is a indication that the juice was extracted from poor quality fruit which is undesi

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