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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."
Q. Why does government undertake an economic activity? If ever an activity has large externality or spill over and includes a large number of people, it may be found better th
Assume the Working Income Tax Benefit tops up a single individual's income by 25 percent of the amount that employment earnings exceed $3000, up to a maximum payment of $950. Suppo
with the aid of labelled production possibilty frontier explain the concept of opportunity cost
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Problem: (a) What do you meant by public policy? What does the study of public policy involve? (b) How are problems that might lead to public policy identified and defined?
Jack and Jill live alone on an island. Their labour supply schedules are identical and given by L = (1 - t)w, where t is the income tax rate and w denotes the wage. Jill's wage i
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