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a) Explain the perverse incentive.
b) What makes the incentive perverse?
c) How could the incentive makers better the incentive?
Disadvantages of State Trading State trading has several disadvantages. (i) State trading is often afflicted by the corruption and inefficiency usually associated with the pu
Economic growth and Economic development: Economic Growth refers to an increase in real aggregate output (real GDP) reflected in increased real per capita income.A country is
Explain why both the PES and PED tend to be inelastic in the short run for primary goods. PED deals with (primarily) the ability and propensity of consumers to switch to other
Change in consumer income: A change in consumer income may bring about a change in the quantity demanded of a good or service. However, the direction of change in quantity deman
herberler theory of opportunity cost
b) Why is monopoly considered to be generally against public interests, and what policy instruments can be used to regulate monopolies?
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Terms of Trade: The ratio of average price of a country's exports, to average price of its imports, is its terms of trade. Theoretically an improvement in a country's terms of trad
Suppose a firm faces two markets for the same product. In market A, the demand function is PA=60-QA, while in market B the demand function is PB=36-0.5QB. The total cost function i
What actions could a government take in order to keep the price above market equilibrium? There are four basic possibilities here; 1) Minimum price; 2) A tax on the good
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