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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.
Case study
Question: (i) There are certain benchmarks for measuring the success of infomercials" what are those benchmarks in relation to the value of a product or service? (ii) It i
An economy has two agents and two goods. Utilities are given by UA=min{xA,0.5yA} and UB=min{xB,0.5yB}. The total amount of X in the economy is 10. The total amount of Y is also 10.
What are the objectives of pubic finance
what are the costs and consequences of providing the subsidies and welfare?
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1. is pareto improved demonstrated using the edgeworth box daigram?
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