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Consider a hypothetical nation, Solowland, which were in the steady state. We consider a constant return to scale production function based on two production factors, labor and cap
It is clear that monopsony in the labor market is not steady with allocative efficiency and has the effect of withholding significant amounts the employees' MRP from them, that bec
Example: The Value of Clean Air Air is free in sense that we do not pay to breathe it. Question: Are benefits of cleaning up air worth the costs? People pay extra to buy
Principle Agent Problem [Dealing with hidden action] Assume that the employer (principle) wants its employee (agent) to work hard [You can safely assume that this maximizes th
Withdrawing MRTP Restrictions: The restriction on the scrutiny of an investment proposal that it does not violate the provisions of MRTP Act was withdrawn. This freed big bus
1. The marginal benefit (demand) curve for pollution for an industry is P=100-4*Q, where Q is emissions in tons. The current emissions tax (price) for pollution is $40/ton. Regu
Do the laws of economics still work today? use the case discussed in class to answer this question or any other examples) (ii) Provide examples of three factors that can shift the
would a rational producer be concerned with the average or marginal product of an input in deciding whether or not to hire the inputs?
Implementation of economic policy: On the ability of civil servants and Government to learn, Government must possess the following qualities to ensure implementation of econom
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