A world bank report in 2007 commented on the continuing need for major spending worldwide on infrastructure in everything from roads and railways to water and electricity generation. A) Explain the effect of national income when there is an increase in spending on infrastructure. B) Discuss whether an efficient allocation of resources can be obtained only if large scale investment is undertaken by the public sector rather than the private sector. A) The national income of a country
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References: Johnson‚ Paul M.‚ Dr. (1994-2005). Auburn University. A Glossary of Political Economy Terms. Retrieved from http://www.auburn.edu/~johnspm/gloss/externality Levitt‚ Steven D.‚ Dubner‚ Stephen J. (2009). Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. ISBN: 978-0-06-073133-5 (pbk)
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could prove more popular and encourage people to make a change. Penalty systems are currently in order to control many factors‚ including emissions. One of the main penalty methods is pigouvian tax. The consumer or producer involved in negative externalities. An example of this would be in the case of petrol. For example‚ if it was found that a gallon of fuel caused damage to the environment the government could impose taxes per gallon would hopefully deter people from over usage or waste as they are
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w w w e tr .X m eP UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS GCE Advanced Subsidiary Level and GCE Advanced Level e ap .c rs om MARK SCHEME for the October/November 2009 question paper for the guidance of teachers 9708 ECONOMICS 9708/22 Paper 22 (Data Response and Essay – Core)‚ maximum raw mark 40 This mark scheme is published as an aid to teachers and candidates‚ to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award
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improve market outcomes because the invisible hand on its own may fail to allocate the resources efficiently. The government may intervene to promote efficiency and equity. The market on its own may cause market failure through externalities and market power. An “externality (is) the impact of one person’s actions the wellbeing of the bystander” (Gans et al. (2009‚ p.11). An example is pollution. Market economies usually do not consider the impact of their activities for example a dry cleaning factory
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Economics 101 Fall 2006 The Final Review Sheet (Prof. Kelly) Note: This is a list of important and key points for topics after the second midterm. This list should be used together with the previous two review lists as the final will be cumulative. As before‚ these review sheets should serve as a checklist for you to see whether you have studied everything you need to for the final. To do well in the final‚ you should focus on your lecture and section notes‚ as well as the practice questions
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unemployment was widespread. Clark University’s open campus policy had positive and negative externalities on the Main South. An externality is a benefit or cost that effects on the well-being of a bystander in
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SUBMISSION QUESTION 7 EXTERNALITIES AND COASE THEOREM (a) Explain what is meant by “externalities”? (b) Consider an industry whose production process emit a gaseous pollutant into the atmosphere. Use the simple supply and demand model to demonstrate that‚ in the absence of any regulation‚ this industry’s production will result in allocative inefficiency in the use of society’s resources. Externalities is cost or benefit from production or consumption of commodity that flow to external parties
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carbon price in order to reduce the negative externalities which cause market failure. Market failure is the situation in which the market fails to produce the efficient level of output (Hubbard et al. 2009). The failure occurs due to the existence of negative externalities (in the case of the environment). Greenhouse gas emission and air pollution produced by power companies and manufacturers are examples of negative externalities. Negative externalities are the costs that affect someone who is
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market for Tobacco is justified. Tobacco is a demerit good which costs more than what people may be aware of. So if left to the market forces they are overproduced. Actual optimum level of output for tobacco is misled due to its negative externalities of consumption. When the figure is drawn according to the MPB (marginal private cost)‚ the curve will reflect the benefits that are enjoyed only by the consumers of that product. On the other hand‚ when we consider the third parties as well and
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