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a) Explain the perverse incentive.
b) What makes the incentive perverse?
c) How could the incentive makers better the incentive?
Monica consumes only goods A and B. Suppose that her marginal uility from consuming good A is equal to 1/Qa, and her marginal utility from consuming good B is 1/Qb. If the price of
cobb douglas production function?
Problem 1: Any development strategy should put people first; indeed, its very effectiveness should be measured in terms of how it impacts the poor. (a) Describe the link bet
Pure Monopoly: Pure monopoly examined the market structure that is generally regarded as the polar opposite of perfect competition – i.e. the monopoly model. Like the perfect
Supply function given by equation QS = 3P - 50. Write an equation proposals if: a) Government introduces subsidies of 5 $ per unit; b) the government introduced subsidies of 15%
Real and nominal GDP, GNP, and Intrest rates, Stock & flow variables, Disinflation, Inflation rates, unemployement rates, labor force, participation rate, output per person, GDP d
Normal profit: Normal profit is when total revenue is exactly equal to total cost when the latter includes both explicit costs. It is the type of profit when made by firms in
How might a firm in an oligopolistic market attempt to increase market share? Explanation of oligopoly; concentration ratio, producer sovereignty Explanation that oligopolie
1. Calculate price elasticity of demand and supply for the following functions when (a) P=8 and (b) Q=6. i. P= 40 - 0.5Q ii. Q= -40 + 0.75P iii
Question: Explain the contribution of capital accumulation in the progress of an economy? Capital makes the technological progress of the economy possible. Different technol
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