In theory, the Pigouvian tax... Group of answer choices revenue should be spent on mitigating the damage caused by the negative externality. requires the introduction of an additional policy such as an information-based policy so people know about the tax. is a sufficient and complete solution to a negative externality type environmental problem.

Q: calculate the money multiplier when the currency drain ratio is 0.1 and the desired reserve ratio is…

A: Money Multiplier is the Value by which the money is multiplied in an economy.    Multiplier = (C/D +…

Q: When the supply of money increases, what happens to the interest rate? A. the interest rate…

A: The total amount of money that is in circulation in the economy at any particular time is referred…

Q: Country A has 6 million workers and Country B has 9 million workers. Each worker in Country A can…

A: Country A has 6 million workers and Country B has 9 million workers. Each worker produces:…

Q: Formulate a deeper understanding of comparative advantage including the impact of government…

A: Comparative advantage is the capacity of an economy to produce a particular item or service at a…

Q: Hat is the NPV of this investment ?

A: Particular Amount Vehicle acquisition cost 48000 Economic life 1 Tax rate 25% ROE 11% ROD…

Q: Discuss 3 major contributing factors for high unemployment rate in a named society?

A: The percentage of workers in the labor force who do not currently have a job but are actively…

Q: Value of the final goods and services produced in a given year corrected for inflation in order to…

A: Base year prices are P0 and current year prices are P1.  The volume of total final goods and…

Q: Suppose a domestic market in a country is perfectly competitive. The domestic market is small and…

A: Here, it is given that the domestic market is perfectly competitive and the economy is importing…

Q: Consider two countries, Switzerland and Japan. Suppose both countries have production functions of…

A: Y = AK1/3L2/3 --------> Production function; Divide both sides by L to get per worker production…

Q: Consider a small economy that does not permit international borrowing or lending. The country's…

A: When small economy that does not allow the global borrowing, lending, or engage in other financial…

Q: The table below shows the relationship between the number of housekeepers hired by a small hotel and…

A: Given information: Fixed salary for each labor $90 a day.  Fixed number of two vacuum cleaners…

Q: 1. In 2013, Roma was a schoolteacher and earned $40,000. But she enjoys creating cartoons, so at the…

A: Explicit costs are normal business costs that show up in a company's overall record and directly…

Q: 16. The monetary base is composed of: Reserves a. b. C. Coins and notes issued by the Fed Currency…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Suppose that a firm that produces face masks is in a long-run equilibrium setting where it has 3…

A: The marginal rate of technological substitution (MRTS), a concept in economics, is the rate at which…

Q: The table shows Jerry's total utility from lottery tickets and candy bars. The price of a lottery…

A: Marginal utility measures the change in total utility to the change in quantity consumed.  i.e.,…

Q: The table below shows market share data for different firms producing desks. Market Share in % 15 18…

A: HHI is the sum of market share squared.  When two companies merge , then the market share of both…

Q: What is the relationship between the monetary base and the Fed's balance sheet?   The monetary base…

A: The top organisation in the banking industry is the central bank. All other banks' operations are…

Q: Just a year after you launched the expansion of DWJ, inflation has raised your marginal cost  by 7%…

A: Price elasticity of demand: It measures the percentage change in the quantity demanded for a 1%…

Q: Write an equation to represent the total costs for each location.

A: Fixed costs: These are the costs which remains fixed irrespective of changes in the production…

Q: Please answer the below three questions, i, ii and iii. 1. Mr. Jack is in the process of expanding…

A: Total cost is the sum of all expenses paid to generate a certain level of production; when this…

Q: Which of the following is true in the dynamic AS-AD model? The dynamic aggregate demand curve is…

A: Introduction The dynamic AD–AS model focuses attention on how output and inflation respond over time…

Q: Consider the following econometric model birthweight = Bo+B₁smoking+u where birthweight is a baby's…

A: Economic data is used to build econometric models, which are then analyzed using statistical…

Q: 3. Instead of assuming a linear demand curve, suppose we assume that demand is char- acterized by…

A: A linear demand curve is the graphical representation of the connection between the price of a good…

Q: 4. Consider four mutually exclusive alternatives: Initial Cost, $ A $770.00 Uniform annual benefit,…

A: The choice between various available alternatives is known as decision making and in economics, the…

Q: G. Using vertical lines, shade in consumer surplus under monopoly H. Using horizontal lines, shade…

A: Consumer surplus is the area below demand curve and above price.    Producer surplus is the area…

Q: happened 7. Measuring Y, and Ỹ₁: A real-world problem faced by policymakers, forecasters and…

A: Potential output is defined as the maximum amount of goods and services that an economy can produce…

Q: Consider an economy than only produces two goods - Blueberries and Batteries. Step 1: Draw a…

A: The production possibility frontier represents the total production of the goods and services in an…

Q: expenditure approach T F 6. GDP is the value of all production during some specified period, usually…

A: GDP is the gross domestic product and is defined as the value of all goods and services produced in…

Q: A firm started advertising its product and this changed the product’s elasticity from -2 to -1.5.…

A: If a given price level the demand is elastic then firm should reduce its price, the percentage…

Q: Consider the Human Capital Accumulation model with a production function given by Y = AK0.5 H0.5,…

A: Introduction Human capital consists of the knowledge, skills, and health that people invest in and…

Q: Show how the concept of focal points can lead us towards unique outcomes in games where multiple…

A: Game theory is a concept that uses statistical and mathematical tools and techniques for analyzing…

Q: 3. The Binkle Binder Corporation sells 3-ring binders in a perfectly competitive market at a price…

A: No, firm should exit the market

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A: For profit maximization, in a competitive firm the marginal cost should be equal to the marginal…

Q: If a market produces a level of output below the competitive equilibrium, then O social welfare…

A: A competitive equilibrium refers to the situation when quantity demanded and quantity supplied of a…

Q: 1. Draw a effect on and supply minimum (a) cheap low-quality. demand diagram to illustrate the of…

A: The lowest price that can be legally set is known as a minimum price, such as the minimum salary or…

Q: Given the following table, use the matrix method to derive the constant and slope parameters of the…

A: Given information

Q: Step 2. Draw another PPF of the economy with the axes labeled. Grab another color…

A: The production possibility frontier represents the total production of the goods and services in an…

Q: Consider a Ricardian trade model where both countries have expenditure share on manufactures 0 =…

A: Under the Ricardian trade model,   Home (H) Foreign (F) Manufactures (m) Am = 1 Am* = 2…

Q: Fill in the following table with the quantity sold, the price buyers pay, and the price sellers…

A: An elastic demand is one in which the change in quantity demanded because of a change in price is…

Q: What would be required for consumers to have the necessary knowledge about a product and how it was…

A: Information Asymmetry is defined as a hazard to an economy. This is because it creates a lack of…

Q: For the cash flows shown, use an annual worth comparison and an interest rate of 12% per year. a)…

A: Annual Wort (AW) = PW(A/P, i, n) = FW (A /F, i, n) Where P is the initial cost and A is annual…

Q: The table below shows Crystal’s total cost of producing different quantities of tie-dyed t-shirts…

A: In Economics, Total cost refers to the sum of fixed costs and variable costs. Fixed cost is the…

Q: One example of a specific environmental indicator which can be used to measure the level of…

A: Answer to the question is as follows:

Q: of 11 Suppose Home is a SMALL country, and that the graphs below represent the Home and the World…

A: Here, the given graph provided information about the home market and world market for tomatoes. In…

Q: In a perfectly competitive market, the type of decision a firm has to make is different in the short…

A: A perfectly competitive firm is a price taker, it takes the price determined by the market forces…

Q: Which of the following statements is true? To increase the interest rate, the Reserve Bank conducts…

A: The monetary policy implies the actions undertaken by a nation’s central bank to control the money…

Q: Price OA+B+C OB+C Refer to the figure. When the price is P₁, consumer surplus is OC A 9₂ Question 5…

A: Consumer surplus is the area below demand curve and above price.  Consumer surplus is the difference…

Q: When the power law is applied to unit costs, unit costs exhibit a(n) a. exponential growth. b.…

A: A power law determines a functional relationship among the two quantities, where a relative change…

Q: 2. Table 2 provides information on income levels and associated life satisfaction scores (on a scale…

A: Here we are given the life satisfaction table corresponding to various level of income. Using this…

Q: If a firm is producing a given level of output in a technically-efficient manner, then it must be…

A: When talking about technical efficiency, it can be said that it describes the relationship between…

Market Failure Analysis

To understand Market failure, we need to first understand welfare economics. An Italian economist, Vilfredo Pareto stated that allocation of resources in an efficient manner such that an economic change, which harms no one and makes someone better off, indicates an increase in social welfare. It is also called Pareto Optimality, where resources cannot further be reallocated without harming one. This does not apply to those economic changes, which harm some and benefit others. social welfare increases if the utility of any of its members' increases and none decrease in the economy.