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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?
It is presumed that every of the different combinations of capital and labour displayed in Table produces the same level of output, which is, 20 units. Combinations are such that i
Let Consider an economy with three states. The following set of stocks is traded: x 1 =(2,2,0) x 2 =(1,0,3) x 3 =(0,2,4). The t=0 prices of these stocks are give
Discuss some of the effects of the economic downturn on supply, demand, inferior goods, complimentary goods, substitute goods, and price. words accepted#
THE KEYNESIAN THEORY OF CONSUMPTION FUNCTION The theory was developed during the Great Depression which plagued Europe and America. During this time, there was excess capacit
p=10, TC= 1000+2Q+.01Q^2, Q=?
Suppose there are two types of T-shirts: branded ones and unbranded ones and people allocate their spending in a way that they buy both types. Suppose the price of branded T-shirts
Q. What do you mean by Oligopoly? Type of market condition that is most appropriate in the today's economy, is oligopoly. It's characterised by mutual interdependence among a f
Disadvantages of a Free Economy The free market gives rise to certain inefficiencies called market failures i.e. where the market system fails to provide an optimal allocation
Bank Deposit Bank notes and coins together constitute the currency in circulation. But they form only a part of the total money supply. The larger part of the money supply i
gap between economic theory and business practice
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