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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?
Now, let's modify our model a bit. Let's add a fourth sector of spending so that Y = C + I + G + X n with X = X o and M = M = f (Y). Will this change, by itself, increase, decrea
Write on one theory of profit. Profit as rent of ability: one of the most widely known theories of profit was propounded by F.A. Walker. According to him profit is the rent of is t
What will be the table of total cost function?
Problem: Long-Run Labor Demand and Factor Substitutability Suppose there are two inputs in the production function, labor (L) and capital (K), which can be combined to produce
assumptions and limitations
When given two demand functions to calculate elasticity of demand do you use point elasticity or arc elasticity of demand formula
Hi Could you please help me with " Ramsey pricing in detail " as I have an assignment.
NATIONAL DEBT Taxation does not often raise sufficient revenue for the Government Expenditure. So, governments resort to borrowing. This government borrowing is called Publi
Q. Causes for diseconomies of scale? The most significant cause for diseconomies of scale is the diminishing returns to management. As the output grows beyond certain level the
What is decreasing marginal cost? All additional lawn mowed generates less benefit than the earlier lawn à along with decreasing marginal benefit; every additional unit generat
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