Use graph of budget sets and standard indifference curves

Assignment Help Business Economics

Reference no: EM131097142

Use a graph of budget sets and standard indifference curves to show that it is possible that a competitive consumer chooses to have her child go to a public school even though the parent would be better off if no public education were available and no school taxes charged. Explain carefully, in a way that would be understandable to someone who has studied intermediate level microeconomics, but not taken this course, why the budget lines in your graph represent the consumer’s situation with and without availability of public education and why your graph shows the conclusion that is asked for in this problem.

Reference no: EM131097142

Questions Cloud

Represented by the payoff function : A decision-maker's preferences over the set A=(a,b,c) are represented by the payoff function u for which u(a)=0, u(b)=1, and u(c)=4/ Are they also represented by the function u for which u(a)= -1, u(b)=0, and u(c)=2? How about the function w for whic..

Calculate and label consumer surplus and producer surplus : Given the following demand and supply curves: (a) Q_d=-P+10 and (b) Q_s=P. Calculate the inverse demand function (provide below) and graph the two lines on Figure 1. Calculate and label the Consumer Surplus and Producer Surplus.

Financial market transaction costs and risks : Assuming the same financial market transaction costs and risks, will funds tend to move toward the U.S. or Japan if the U.S. interest rate is 5%, the Japanese interest rate is 2%, and there is a forward discount on the dollar of 2%? How ill this effe..

Total revenue and the price elasticity of demand : Recall the relationship between total revenue (TR) and the price elasticity of demand. Explain why a (single-price) monopolist will never produce on the inelastic part of the demand curve.

Use graph of budget sets and standard indifference curves : Use a graph of budget sets and standard indifference curves to show that it is possible that a competitive consumer chooses to have her child go to a public school even though the parent would be better off if no public education were available and n..

If average variable costs are constant-about marginal cost : If Average Variable Costs are constant, what must be true about Marginal Cost? If Average Variable Costs are constant what must be true about Total Cost? If Average Variable Costs are constant, what must be true of Average Total Cost?

Sources of externalities associated with education service : List four different sources of externalities associated with education service that make it likely that an inefficiently small amount of the service would be provided in competitive equilibrium without gov intervention. Explain why each source you li..

If the demand for final product rises : If the demand for a final product rises, then this results in

Federal sales tax on goods and services : In the last few years, the Federal government cut the GST (the federal sales tax on goods and services which Ontario later blended into the PST to create the HST) by two percentage points. The federal government could have transferred this cut to inc..

User Account

All Pages