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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?
Model Specification We proceed with the model specification in the following steps. 1) The economy is composed of competitive firms (F in number) and identical workers
The Learned Book Company has a choice of publishing one of two books o the subject of Greek mythology. It expects the sales period for each to be extremely short, and it estimates
Features of Free Market System The features of a free market system are: (i) Ownership of Means of Production Individuals are free to own the means of producti
TERMS OF TRADE The relation between the prices of a country's exports and the prices of its imports, represented arithmetically by taking the export index as a percentage of t
Q 3. What is Demand Forecasting? Explain in brief various methods of forecasting demand.
Why we need to distinguish between private cost and social cost?
CAPITAL MARKETS Markets in which financial resources (money, bonds, stocks) are traded i.e. the provision of longer term finance - anything from bank loans to investment in pe
TYPES OF UNEMPLOYMENT A person can be either in the labour force or not in the labour force of an economy. The person not included in the labour force includ
Measuring Point Elasticity on a Non-linear Demand Curve Let's now explain the method of measuring point elasticity on a non-linear demand curve. Assume we want to measure the
A mother is torn among choosing her son Leonardo and her daughter Meryl to have the last bar of chocolate in her cupboard. As both her children's needs the chocolate and she needs
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