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When somebody wearing muddy shoes rides a public bus, he imposes a negative externality on other riders (passengers get some mud rubbed off on them, and the shoes look ugly). If a
Business sell to households in the resource markets, but households sell to businesses in the product market
Indifference Curves: Every consumption-leisure point, (l; c), in the diagram is associated with a unique level of utility. The line II represents the individuals indifference curv
Pollutant Any substance, species produced either by a natural source or by human activity, which produces very adverse effect on the environment is called pollutant. Some commo
Explain why each of the following factors may influence the own price elasticity of demand for a commodity. (i) Consumer preferences, that is, whether consumers regard the commod
Slope of an Iso-quant: Since along an iso-quant the level of output remains the same, if θL units of θL are substituted for K units of K, the increase in output due to θ L
Attitude towards Risk: Let's assume the following: The utility function • has the single argument "wealth" measured in monetary units, • is strictly increasing, and
INTERNATIONAL DEVELOPMENT ASSOCIATION: International Development Association (IDA) is an affiliate of the IBRD. It was established in 1960 to provide "soft loans" to economica
"Assume the local fixed telecommunications company is a monopoly. It costs the company €2 per month to give voice messages service to a customer. Elasticity of demand for voice mes
a) Explain the perverse incentive. b) What makes the incentive perverse? c) How could the incentive makers better the incentive?
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