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1. Consider a world with two assets: a riskless asset paying a zero interest rate, and a risky asset whose return r can take values +10% or –8% with equal probability. An individua
What are externalities? Give an example of positive and negative externality and explain why the market outcomes are inefficient in the presence of externalities
Question 1: Using relevant examples to illustrate your arguments analyze the different economic impacts of tourism and discuss the different ways in which government can maximi
what is the theory of Second best? Prove the theorem with the help of a diagram.
4 models
detail of consumer surplus with examples
Given the following demand and total cost functions for a firm P = 4500 - 0.5Q 2 TC = 1.5Q 3 - 50Q 2 + 1000 i) the marginal profit function
1) The Economy cannot be considered fully employed unless the measured unemployment rate is below 1%. Agree or disagree and explain your answer in a paragraph. 2) A) Why would y
Engel Curves -Engel curves relate quantity of good consumed to income. -If good is a normal good, Engel curve is sloping upward. -If good is an inferior good, the Engel c
value of marginal product
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