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(1) The federal government is considering selling tracts of federally owned land to private developers and using the revenues to provide aid to victims of an earthquake in a foreign country. How would this policy affect the levels of federal revenues, expenditures, and deficits under a cash accounting system? What would be different under a capital accounting system?
(2) A government is considering paving a highway with a newly developed "wear-proof" material. Paving the highway would cost $2 billion today, but it would save $300 million in maintenance costs for each of the next 10 years. Use the concept of present value in maintenance costs for each of the next 10 years. Use the concept of present value to determine whether the project is worth undertaking if the government can borrow at an interest rate of 5 %. Is it worth it if the interest rate is 0 %? 10 % ? A politician says to you, " I don't care what the interest rate is. The project is clearly a good investment: it more than pays for itself in only 7 years, and all the rest is money in the bank." What's wrong with this argument and why does the interest rate matter?
(3) Suppose that demand for a product is Q-1200- 4P and supply is Q= -200 +2P? Furthermore, suppose that the marginal external damage of this product is $8 per unit. How many more units of this product will the free market produce than is socially optimal? Calculate the deadweight loss associated with the externality.
The other type is called ex-post heterogeneity which refer to the conflict (of interests) arising due to distributional implications of the public policy. Thus when a public polic
Question 1: "A Policy may be defined as a major course of action within a given environment intended to reach a goal or realize an objective." Give an account of the making
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eiplain why indifference curve are convex to the origin
Question: Awards for excellent performance are increasingly employed within the public service in many countries. These will or will not have a financial value. Performance-rel
Alice and Bob survive on hamburgers and salads. Aliceís utility function is UA = hA(sA 1) where hA and sA are her consumption of hamburgers and salads respectively. Bobís utility
Q. Define Heterogeneity? We know that breaking of the assumptions of homogeneity of agents, in welfare economics, makes it difficult to define social welfare function. Breakin
WHAT IS THE CONCEPT
privatization can always decentralise economic power. critically discuss
The report which you should submit to me should include: A brief analysis of the control systems required for the health and safety of operatives and others who may be affect
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