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Carmen, the Queen of Electra, is concerned over what she believes is an excessive consumption of electricity. Consequently, she proposes an excise tax on electricity consumption which, if implemented, would add $500 per year to the taxes of the average Electran household. An advisor to the Queen warns of a consumer backlash and suggests the following amendment-give the $500 back in the form of a tax rebate. The Queen thinks this is the dumbest idea she's ever heard. She reasons that such a plan would do nothing to reduce electricity consumption since the plan would take away $500 with one hand, but give it back with the other!
Do you agree with the Queen or not? Fully explain your answer using standard indifference curve analysis.
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The price of milk is usually much less expensive in a grocery store versus a convenience store. Using economic terminology, explain why people purchase milk at convenience stores.
Analyze the various ways in which property rights encourage economic development and make at least one recommendation for improving current laws. Explain your rationale.
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What factors shift the Aggregate demand curve to right and what factors shift the AD curve to left? AD shifts to the right when any component of AD enhances autonomously; e.g
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Prove that the utility approach and the indifference curve approach yield the same consumer equilibrium.
conditions of pareto optimality
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