Is the given policy likely to be an efficient policy

Reference no: EM13794891

Assume that there are only two goods in the economy: video games and water. The total amount of these goods are given, there is no production. The world is inhabited by two people: Ann and Bob. Assume that Ann and Bob have regular preferences (not necessarily same for Ann and Bob) over video games and water; and that they have some endowments of these two goods. Now a well-intentioned politician says that because water is scarce and it is a necessity, both Ann and Bob should get half of the overall water resources (and get to consume their respective endowents of video games). Is this likely to be an efficient policy? Use the Edgeworth-box to justify your answer.

Reference no: EM13794891

Questions Cloud

Explain critical need for transitional services for students : How would you explain the critical need for transitional services for students with disabilities? What are challenges associated with transitions for students with disabilities?

Detectives working in plain clothes : You and your partner are detectives working in plain clothes. For several days, you have been staking out an elementary school playground where an adult male reportedly has been approaching the children.

Purposely underestimate bids in order to win nasa contracts : Kendahl Plastics Corporation contracts with NASA to manufacture component parts used in communications satellites. NASA reimburses Kendahl on the basis of the actual manufacturing costs it incurs, plus a fixed percentage. Let us assume that it is com..

The economic impact of the law related issues : Should the United States adopt additional policies or laws to curb greenhouse gas emissions?

Is the given policy likely to be an efficient policy : Assume that there are only two goods in the economy: video games and water. Is this likely to be an efficient policy? Use the Edgeworth-box to justify your answer.

Stock dividend to stockholders-record the transaction : On January 1, Ripken Corporation had 40,000 shares of $10 par value common stock outstanding. On March 17 the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to rec..

Providing global security services : Research and select two organizations involved in providing global security services.

The entry to record the transaction : On January 1, Ripken Corporation had 40,000 shares of $10 par value common stock outstanding. On March 17 the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to rec..

Elements of a political realignment : Describe the elements of a political realignment, when a dominant party coalition replaces another. Illustrate using one particular period from U.S. history. Is the current era undergoing any sort of major realignment? Why or why not?

User Account

All Pages