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In a model where a continuum of individuals have preferences for consumption and leisure as follows
wi = ci + ln(xi)
and individuals differ in their labour endowments ei, suppose two candidates run for office and offer a platform of imposing a proportional tax rate τ to finance lump sum transfers uniformly to all the population.
Where the planner maximizes the average individual's welfare. Are taxes higher or lower at the median voter solution? Why?
the basic assumption of the static model
Financial engineering deals with the design of new assets. Draw the payoff (at t=1) of the following bull butterfly spread: Purchase 1 call with exercise price a Sell 2 calls
i want information about the theory of supply
summary
Consider a Bertrand duopoly. The market demand is q=190-p. Consumers only buy from the firm whose price is lower. If two firms charge the similar price, they share the market equal
The managing director of Christine plc, a company which specialises in acquiring small businesses, has considered the following potential investments. Only one of these investments
What is the social capital? Social Capital: Social capital is related with Putnam: Social capital considers to as features of social life as networks, norms and trust whi
1. Imagine that two countries, Richland and Poorland can produce just two goods, computers and coal. Assume that for a given amount of land and capital, the output of these two pro
Why is not Aid improving development? Aid not improves development because: • Aid is spent on current consumption • It is spent on unsuitable capital as opposed to suitab
what is the short run and long run effects of a new idea creating by a restaurateur i.e home cooking services in the perfect competitive market?
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