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Suppose you are a regulator in charge of allocating water between residential and agricultural users (farmers) in Southern California. You conduct a survey that finds that under the current split the average residential water consumer would be willing to pay up to $0.70 a gallon for the next gallon of water they consume while the increased market value of crop production from the gallon of water (after farmers pay their costs) to the most profitable farmer would be $0.20. Is the current allocation of water economically efficient (circle: yes or no)? If not, in what direction should the water be reallocated? In a sentence or two explain how we would expect these two quantities to compare to each other if net benefits were maximized.
Privatisation in the narrow sense can take several forms: a) Total Denationalisation: This implies complete transfer of ownership of apublic enterprise to private hands. Some
Problem 1 (a) Explain the evolution of exchange rate system in Mauritius. (b) According to you, what factors determine exchange rates in the long run? Problem 2 "Inf
in the case of a decline in velel of private investment spending, why the effect on equilibrium output exceeds the magnitude of the initial shock? also, what are the effects of th
Some Cost Considerations for Managers * Three guidelines for estimating the marginal cost(MC): 1) Average variable cost should not be used as substitute for the marginal cost(
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About four years ago, Kanye West performed at the UIC Pavilion. General admission tickets were priced at $30. Concert promoters say that price elasticity of demand for general admi
1. Go to the website for MarginalRevolution. Find">http://www.marginalrevolution.com Find two posts that related to microeconomic topics that we are covering and write about on
Expectations played a major role in Keynes' theory of the determination of aggregat output and employment in market economies in the short run. Expectations about future yields on
Diseconomies of Scale A rises in a firm's cost of producing an additional unit as all another factors of production rising. Diseconomies of scale can be caused by poor and ine
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