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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."
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
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Define the concept of economic growth?
critically examine that privatization can always decentralize economic power
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A change in the legal statute may be able to force an equilibrium if it leads to a new equilibrium which implies some revised belief which sustains the equilibrium. Tirole (1996)
Probelm 1: (a) What are the main roles of Government in the economic development of a country? (b) What are some of the emerging issues affecting the role of Government?
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
An economy has two agents and two goods. Utilities are given by UA=min{xA,0.5yA} and UB=min{xB,0.5yB}. The total amount of X in the economy is 10. The total amount of Y is also 10.
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