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Problem 1:
(a) Differentiate between positive and negative externalities? Justify your answer using examples.
(b) To what extent do government policies influence externality?
Problem 2:
(a) Explain how in economic theory a perfectly competitive firm determines price and output in the long run.
(b) ‘A monopolist is inefficient as compared to a perfectly competitive firm'. Discuss.
You are examining the effects of a specific tax of 10 cents imposed on the sales of a product that we shall call XYZ. To carry out your analysis, assume that the market is a perfec
a) Joan's utility function can roughly be estimated as : U = 60Q 1 3/4 Q 2 2/3 She chooses from two composite commodities Q 1 and Q 2 whose prices per unit are kshs 20
Identify the four essential economic activities. The four main economic activities are: a) resource maintenance, b) production, c) distribution, and d) consumpti
discuss how the price mechanism allocate resources in a free market system
explain why policies for promoting market competition are desireable
Financial Economies: These are benefits obtained by large firms as a result of contracting credit from financial institutions at lower interest rates than smaller firms. The
Dynamic Changes in Costs: The Learning Curve
Determinants of the price elasticity of demand are explained below: 1. Number of close substitutes present within the market - The more and closer substitutes available in the
Write the formulas to show the reactants and products for the following reactions. Assume that solutions are aqueous unless otherwise indicated. Represent substances in solutions a
Ask quAsk qIf the supply and demand curves for labor are represented by the following equations: Wd= -- (1/100)Ld + 30 Ws= (1/200)Ls Ws=Wd Ld=Ld a. Graph the results and show the
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