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Q. Why does government undertake an economic activity?
If ever an activity has large externality or spill over and includes a large number of people, it may be found better that government undertakes it. As David Hume once pointed out, it is easy for two persons to agree/bargain for terms of draining a field affecting them but it would be very difficult for a large number of persons to make the decision on terms of sharing cost of drainage.
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Consider the Edgeworth box with the production of consumption goods B and health- investment goods I. (a) Briefly explain the derivation of the contract curve. (b) How does one der
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examine the efficiency of quantitative credit control instruments.
Q. Relationship between individual preference and social choice? Social Choice is a very kindred area. Some people don't make any distinction between the two while others make.
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