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Pigouvian taxes and subsidies are often cited as a simple way to solve the incentive problems caused by externalities.
(a) Explain what a Pigouvian tax is and how it can solve externalities.
(b) Provide an example of an externality where Pigouvian taxes are likely to be effective, and an example of an externality where Pigouvian taxes may not be effective. Explain your reasoning. Hint: What do we need to know in order to set up a Pigouvian tax?
Elaborated with examples and supportive references as to how can index numbers be helpful in understanding time-related data?
Assuming that all of Tucker's sales are on credit, what will be the firm's operating cycle? (Round your answer to 2 decimal places.)
Illustrate what is level of utility the person will attain on a daily basis. Illustrate what will be the average level of utility attained per day during the year.
Explain why a perfectly competitive firm may continue to operate in the short-run even with a loss of profits.
If a 10 percent increase in both capital and labor causes output to increase by less than 10 percent, the production function is said to exhibit decreasing returns to scale. If it causes output to increase by more than 10 percent, the production func..
You observe the following facts about a fictional economy: The capitaloutput ratio is 3. The country uses 15% of GDP to replace depreciated capital. The average growth rate of the economy is 2.5 percent. What is the rate of depreciation in this econo..
An entrepreneur needs funds for a project. He has funds of his own, but enough to cover the required investment of $100. If the entrepreneur doesn’t misbehave, the project will succeed with probability .9, yielding a gross return of 120 in one year. ..
You have $21,512.72 in a brokerage account, and you plan to deposit an additional $5,000 at the end of every future year until your account totals $240,000. You expect to earn 14% annually on the account. How many years will it take to reach your goa..
Identify the international organization that makes loans to developing countries.
Write about Production Economics and Decisions. Please respond to the following 9 items. While these videos are diverse, the managerial economist should have these in their scope of the field of production economics and decisions that are made.
Under what conditions should a manager use each of the following rules/options for pricing decisions: (a) Maximax Rule; (b) Maximin Rule; (c) Minimax Regret Rule; and (d) Equal Probability Rule? Also address the potential pitfalls of using each rule.
An amount of $47580 is invested in a term deposit which earns continuous compounded interest daily. Then, as each term expires, the balance is rolled over
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