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Problem 1:
i) To what extent can a country actually rely on the principle of Comparative advantage before engaging in international trade?
ii) Explain the different types of barriers that exist to trade.
iii) Why should a country protect its domestic firms?
Problem 2:
i) Why should the government intervene in the production of merit and demerit goods?
ii) What would you consider as the main failures of a market economy? How are such failures normally dealt with?
iii) Given that government intervention is not always beneficial, comment on its potential limitations.
Suppose the demand curve for a consumer for coffee is: Q = 6 – 2P, where Q represents the number of cups per day and P is the price of coffee per cup. Question: Suppose the
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an emission fee levied against polluting firms will tend to shift the supply/demand curve of the firm/product to the left/right?
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What are the properties of indirect utility function? Properties of the indirect utility function: While u(x) is continuous and monotonic onto R L + and (p, m) > 0, the in
How is consumer utility calculated?
What two important functions are performed by the price system? (1) The price system is an automatic method for distributing goods and services. (2) The price system defines t
Mathematical Presentation of Utility maximisation: Consumer's objective is to maximise her utility by solving UMP. To solve UMP, we set the Lagrange function of the correspond
what is the indirect utility/
How do we measure economic growth and why do we need economic growth? (ii) What can governments do to stimulate economic growth and create jobs? (provide some current examples) (ii
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