a. Explain the difference between merit goods‚ demerit goods and public goods (10 marks) Merit goods‚ demerit goods and public goods could all cause market failure‚ which is a situation where goods and services in a free market are not allocated efficiently. The ways in which these 3 kinds of goods cause market failure are different and will be explained below. Firstly‚ merit goods refer to goods with positive externalities. This means that its consumption or production can create unintended positive
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Business Economics GM545 Winter 2013 Chapter 16 Question 5 Frictional unemployment also known as search unemployment distinguishes the time period between jobs when a worker is searching for or transitioning from one occupation to the next. Unemployment that exits in a fast growing economy with an expanding mobile‚ elastic and adaptable labor force of having many different options. With this type of structure can be beneficial to workers because it allows them to seek for positions they desire
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Aggregate Expenditure: relationship showing (at a given price level) Real GDP. * Y=C+I+G+NX Consumption Function (C): A relationship between disposable income (income-tax) and consumption * C=a+b(Y-T) * a-autonomous spending * b-MPC * Y-Aggregate expenditure * T-net taxes (tY) * Marginal Propensity to Consume (MPC) * Δ consumption/Δ disposable income * Marginal Propensity to Save (MPS) * Δ savings/ Δ DI * DI-MPC=Savings * MPS+MPC=1
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1) Some definitions 2) Economics as a science 3) Production possibilities frontier Reading Chapters 1‚2‚3 Definitions Economics: the study of the choices people make and the actions they take in order to make the best use of scarce resources in meeting their wants and needs Economic choices: Consider some activity X. Then a simple rule of economics is: If benefits (activity X)> Costs (Activity X)‚ then do activity X If Costs (activity X) > Benefits (activity X)‚ then do not do
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UNIT 4 INDIVIDUAL PROJECT ECON220-1205B-05 : Microeconomics by Kendra M Hutchins AIU Online Abstract This paper will discuss the concerns of correcting the effects of gases and particulates emitted by a local power plant and how the market activities have unintended positive or negative effects outside the market’s scope. These effects are referred to as externalities and therefore‚ will examine the cost and benefits of each action. Externalities In the business world‚ things will
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Managerial Economics B Ad 5102 Study Guide for Mid-Term Exam DO PRACTICE QUIZZES‚ STUDY GUIDE QUESTIONS‚ PROD EX‚ TEST BANK You may construct a “formula sheet” that has only expressions‚ no words‚ except those words that identify the formula or use a sheet that is a legacy of previous classes. Your own personal sheet will need to be inspected by me upon completion of the test. The test will cover Chapters 1-3 and 5. You will respond to five (5) of six (6) identification questions
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Lecture Note # 1 Measuring the Key Economic Indicators Microeconomics: Looks at how individual economic agents (i.e. consumers/households and producers/firms) make their day-to-day decisions. Macroeconomics: Looks at the overall behavior of the entire economy of a country. So in addition to households and firms‚ it also looks at the government and frequently at the rest of the world. The four target variables that all macroeconomists are concerned about are: (1) Gross Domestic Product (GDP):
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Economics 472 Economics of Renewable Resources Final Examination April 21‚ 2012 Time: 2 hours Answer any THREE questions. Do not attempt to answer more than three questions. The three questions that you answer will be given equal weight. 1.(a) Consider now a newly planted stand of trees. What decision rule should be employed for determining the “optimal” investment in the trees – the optimal rotation – given that the stand of trees is being managed on a Single Rotation basis? Explain
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’Brilliant’‚ ’Quite Good’‚ ’What?’‚ these are just some of the comments made recently in the press regarding economic development. I really‚ really like economic development. While it has been acknowledged that it has an important part to play in the development of man‚ it is yet to receive proper recognition for laying the foundations of democracy. Inevitably feelings run deep amongst global commercial enterprises‚ who are likely to form a major stronghold in the inevitable battle for hearts and
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Review sheet for Exam 2 – Principles of Macroeconomics What are the two focal areas of macroeconomics? What are business fluctuations? The phases of a business cycle‚ and the characteristics of each phase. Business fluctuations in the growth rate of real GDP around its trend growth rate. Employment and Labor force concepts including computations of these (e.g. unemployment rates‚ labor force participation rates‚ U-rates of labor underutilization etc.) Categories of unemployment Frictional-
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