FINA 3023 Financial Markets & Institutions Class 15 Today s Today’s class The role of financial intermediaries Brokers and dealers Problems in (financial) markets: Asymmetric i f A t i information ti Adverse selection Moral hazard Chapter 8 p 2 The market for “lemons” lemons When‚ in a market‚ sellers of a product know more (asymmetric information) about it than the buyers‚ the market does not function properly. properly “The Market for Lemons: Quality Uncertainty
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someone who is not directly involved in the production or consumption of a good or service (Hubbard et al.‚ 2012). These externalities cause differences between private and social costs and benefits and inadvertently undermine the efficiency of a market. In this particular case‚ the production costs of any good that emits carbon as a byproduct is not just borne by the producers themselves‚ but also society as a whole. This pollution of the atmosphere may give rise to numerous problems that society
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The U.S. Economy: Private and Public Sectors ANSWERS TO END-OF-CHAPTER QUESTIONS 4-1 4-2 4-3 Distinguish between the functional and personal distribution of income. Which is being referred to in each of the following statements? “The combined share of wage income and proprietary income has remained remarkably stable at about 80 percent since the Second World War.” “The relative income of the richest households is higher today than in 1970.” The functional distribution of income shows
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In congestive heart failure‚ the heart is not able to pump enough oxygen and nutrition to meet the requirements of the body and it may be chronic or acute. Heart failure is caused by many disorders that injure the heart muscles including‚ heart attack‚ cardiomyopathy‚ coronary artery disease‚ and conditions that overwork the heart‚ such as high blood pressure‚ diabetes‚ thyroid problems and kidney problems. At the point when a heart starts to fail‚ it causes additional liquid to develop in the body
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Externality: the uncompensated impact of one person’s actions on the well-being of a bystander Externalities and Market Inefficiency Negative Externalities Ex: aluminum factories emit pollution: for each unit of aluminum produced‚ certain amount of smoke enters atmosphere Cost to society of producing aluminum larger than cost to aluminum producers Social cost includes private costs of aluminum producers plus costs to those bystanders affected adversely by the pollution How can social planner
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concluding the optimal situation in the model and a variation with the presence of mimickers‚ I discuss a few aspects of the basic model‚ which interest me the most‚ including (4.1) the meaning of price in the model‚ (4.2) positive externalities‚ (4.3) market provision‚ (4.4) inefficient provision and (4.5) an extreme scenario when only high-income group finances the public provision with only low-income group consuming. A brief conclusion is drawn at the end. 3. A Basic Model and Mimickers As is mentioned
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ECON 100A Public Goods and Coase theorem April 29-May 2 Part I Public Goods A good is a (pure) public good if once produced it meets two criteria: 1. Non-rival - A good is non-rival if consumption of additional units of the good involves zero social marginal costs of production. 2. Non-excludable - A good is non-excludable if it impossible‚ or very costly‚ to exclude individuals from benefiting from the good. Taking these two criteria we can categorize goods into four groups. Rival
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benefit. | Wikipedia | In economics‚ an externality is defined as a cost or a benefit stemming from a transaction that affects various third parties who are not part of the transaction. | Wisegeek | Define externality as cost or interest from a market transaction that not imposed any price. It refers externality occur effect to third personnamely other than seller and buyer. Cost or interest discounted inproduction (seller) or usage (buyer). | Hyman (2002) | Eksternaliti is activity some party (household or firm) influence utility
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report considering the following points. Write 1‚400 – 1‚750-word paper of no more than in which you describe how each of the following are or potentially will affect your industry or one with which you are familiar: • New companies entering the market‚ mergers‚ and globalization‚ on pricing and the sustainability of profits: Identify the type of merger activity in your industry or one with which you are familiar–horizontal‚ vertical‚ or conglomerate–and explain why you made that choice. • Current
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BU224-01 November 23rd‚ 2010 HOMEWORK - UNIT 9 EXTERNALITIES & TAXES‚ SOCIAL INSURANCE‚ AND INCOME DISTRIBUTION Chapter 19: Problems 1 and 5 on pages 472-474 Chapter 21: Problems 4 and 9 on pages 517-518 Chapter 19 / EXTERNALITIES /25 1. a. Mrs. Chau plants lots of colorful flowers in her front yard. What type of externality (positive or negative) is described? (2pts) Positive externally. Is the marginal social benefit of the activity greater than or equal to the marginal
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