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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. What is External Diseconomies? The expansion of an industry is likely to generate external diseconomies that raise the cost of production. An increase in the size of industr
explain how income flows in governed economy
Prediction markets: These are speculative markets fashioned with the intention of making predictions. Assets which are produced possess an ultimate cash worth bound to a specific
Q. Analysis of team production? Harold Demsetz and Armen Alchian's analysis of team production is a clarification and amplification of earlier work by Coase. According to them,
Exceptional supply curves In have some situations the slope of the supply curve may be reversed. i) Regressive Supply. In this case, the higher the price within a ce
Determine the concept of Law of demand We have considered numerous factors which fashion the demand for a commodity. As explained the first and most important factor which determ
Advantages a. It is more equitable. The broader shoulders are asked to carry the heavier burden. b. It satisfies the canon of productivity as it yields
types of capital budgeting
what does it mean?
Basic textbook models, such as the Mundell-Fleming model, say that capital inflow happens due to the domestic interest rate being higher than the world interest rate, and therefore
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