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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. Breaking of the assumption of homogeneity means we are going to accept that agents are not homogeneous, i.e., not identical in their tastes and preferences, incomes and intellectual grounds, in other words, they are heterogeneous.
Remember, this heterogeneity is the cause of conflict. Conflict is the cause of political existence. Its importance has been appreciated in some economic literature of public policy. Atkinson and Stieglitz (1900), for example, write, "If everyone had identical tastes and endowments, then many public finance questions would lose their significance, and this is particularly true of the behaviour of the state. If the interests of the members of society could be treated as those of ‘representative' individual, then the role of state would be reduced to that of efficiently carrying out agreed decision."
Pigovian Analysis The starting point of the Pigovian welfare analysis is the notion that there is a resource allocation problem that can be optimally solved. Through hi
How does it work? how is its basic structure?
why-this-behavior-consistent-with-size-maximizing-government
‘…Policies that promote residential mobility and increase the knowledge of the consumer-voter will improve the allocation of government expenditures in the same sense that mobility
3 voters, A, B, and C, will decide by majority rule whether to pass bills on issues X and Y. Every of the two issues will be voted on indiviually. The change in net profits (in dol
What are the properties and limitations of GDP as a social welfare function?
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Write a short note on product mix efficiency?
Consider a case, if an insurance company merges with a bank. We know that insurance company bears risk for insurers. Suppose, after merger, bank gets in some trouble for reasons ot
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