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1. How does the marginal social benefit curve of a common resource compare to the marginal social benefit curve of positive externality from a mixed good? Highlight the differences through graphs.
2. a. Suppose the demand for saline solution is perfectly inelastic for contact lens wearers. If the government imposes a tax on saline solution, what occurs? Be sure to tell what happens to the price paid by the buyers and discuss the incidence of the tax.
b. If income tax rates on labor income are decreased, what is the effect on the labor supply and the labor supply curve? What is the effect on the equilibrium quantity of labor hired?
1. Describe why government regulation is required, citing the major reasons for government involvement in a market economy. 2. Justify the rationale for the intervention of gove
Consider two hypothetical nations, Solowia and Growia, which are defeated in wars. These two nations were suffered from wars differently; the damage is on capital stock in Solowia,
Suppose the price of printing paper for digital cameras has recently risen by 10 percent due to an increase in the cost of materials used in the finish for the paper. As a result,
Three factors that determine demand for coffee and tea
FACTORS AFFECTING FLEXIBLE EXCHANGE RATE: Shifts in the demand and supply schedules for foreign currency take place on accountof a number of factors. Some of them are enumerat
why the PPC curve slopes downward?
What is Nancy’s lifetime income as a function of her level of schooling, S? 2. What is Nancy’s lifetime income if she gets no schooling? What is it if she goes to school for all 60
2. 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 per
Explain opportunity costs using a PPF where investment goods are on one axis and consumption goods on the other. Again, a good definition of opportunity costs linked to the not
Determine the Slutsky Equation. Income-Substitution Effect: The Slutsky Equation A fall into the price of a good may have two sorts of consequences: substitution effect, whe
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