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The only road connecting two populated islands is currently a freeway. During rush hour, there is congestion because of the heavy traffic. The marginal external cost from congestion rises as the amount of traffic on the road increases. At the current equilibrium, the marginal external cost from congestion is $5 per vehicle. Would a toll charge of $5 per vehicle lead to an economically efficient amount of traffic? If not, would you expect the economically efficient toll to be larger than, or less than $5?
Q. Explain the Game theory? Game theory: Game theory is a branch of applied mathematics which is used in the social sciences, most particularly in economics, as well as in b
A cut in price from Br 1.50 to Br 1.20 leads demand for a product rise by 10% What would the price elastic of demand before this product ? interpret the result by identifying the t
different types of markets and role in managerial economics
LONG RUN OUTPUT In the LR whether or not the firm makes profit will depend on the conditions of entry. For example, when surplus profits exist, there will be new entrants bec
demand for sting ray
Real Vs Nominal GNP: "Deflating" by a price Index One of the problems that confront economists when measuring GNP is that they have to use money as the measuring rod. Thes
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Mankiw Model of Nominal Rigidities There are two related reasons for which firms do not frequently change prices. First, as we saw in the discussion on menu costs, the cost
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