Example of standard indifference curve analysis, Microeconomics

Assignment Help:

Carmen, the Queen of Electra, is concerned over what she believes is an excessive consumption of electricity.  Consequently, she proposes an excise tax on electricity consumption which, if implemented, would add $500 per year to the taxes of the average Electran household.  An advisor to the Queen warns of a consumer backlash and suggests the following amendment-give the $500 back in the form of a tax rebate.  The Queen thinks this is the dumbest idea she's ever heard.  She reasons that such a plan would do nothing to reduce electricity consumption since the plan would take away $500 with one hand, but give it back with the other!       

Do you agree with the Queen or not?  Fully explain your answer using standard indifference curve analysis.


Related Discussions:- Example of standard indifference curve analysis

Microeconomic monopoly, A monopolist faces the following demand function fo...

A monopolist faces the following demand function for its product: Q = 45 - 5P The fixed costs of the monopolist are $12 and the variable costs are $5 per unit. a) What are the

Pure competition and efficiency, Allocative efficiency criteria are satisfi...

Allocative efficiency criteria are satisfied by the competitive model.  Because P = MC, in each market in the economy there is no over- or under- allocation of resources in this ec

Role of managerial economist, Explain the role of managerial ecnomist in ki...

Explain the role of managerial ecnomist in kissan &dipsy fro ub group

The hypothesis of rational expectations, The Hypothesis of Rational Expecta...

The Hypothesis of Rational Expectations : In the General Theory (Keynes, 1936) we noted that the state of expectations was taken as given. There was, in addition, explici

New classical busines cycle thoery, NEW CLASSICAL BUSINES CYCLE THOERY: ...

NEW CLASSICAL BUSINES CYCLE THOERY: Yang, Xioaokai,  Economics: New Classical versus Neoclassical Frameworks, Oxford: Blackwell Publishers.  The book goes on to rigorously dev

Describe what is meant by cross elasticity of demand, Question: (a) Wit...

Question: (a) With the help of diagrams, explain how the price and quantity demanded or supplied of fuel will change under the different scenarios: (i) Consumers expect a fu

Micro economics, If the Bank of England wanted to discourage investment spe...

If the Bank of England wanted to discourage investment spending and reduce aggregate demand, it could? A. reduce the required reserve ratio B. sells securities on the open m

Describe clearly how the interest rate is determined, (a) Describe clearly ...

(a) Describe clearly how the interest rate is determined in: (i) Loanable Funds Framework; and (ii) Liquidity Preference Framework. (b) According to Liquidity preference

Determinants of social demand for education - excellence, Determinants of S...

Determinants of Social Demand for Education - Excellence Apart from the three considerations identified by Prof. Musgrave for public investments in education and discussed abo

Rational producer, would a rational producer be concerned with the average ...

would a rational producer be concerned with the average or marginal product of an input in deciding whether or not to hire the inputs?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd