1) What are the two assumptions which underlie the conclusion that free markets are efficient? 2)...
1) What are the two assumptions which underlie the conclusion that free markets are efficient?
2) Economists disagree on the issue of how much labor taxes distort the outcome in the labor markets and create deadweight loss. What characteristics of labor supply is at the heart of the disagreement?
Homework Answers
Free market concluded two assumptions that make free economy efficient are :- consumer surplus and producer surplus . Free market producer quantity of good that maximize the consumer and producer surplus.
Consumer surplus :- it is monentary gain obtained by consumer because they pay less price for good than the highest price that they would be willing to pay.
Producer surplus:- it is amount which is benefitted by seller by selling good at market price which is higher than the least that they would be sell for.
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1) What are the two assumptions which underlie the conclusion
that free markets are efficient?
2)...
What are the crucial assumptions that underlie the Two-Fund separation result upon which the CAPM is...
What are the crucial assumptions that underlie the Two-Fund separation result upon which the CAPM is based? (Note: Two-Fund separation is the result that all investors find it optimal to form portfolios containing only the market portfolio and the risk- free asset). Give some indications of how Two-Fund separation would break down if the assumptions were violated.
Number 6 please tax a. What is b. What is 102 Part 1 Basic Concepts c....
Number 6 please
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What are the crucial assumptions that underlie the Two-Fund separation result upon which the CAPM is based? (Note: Two-Fund separation is the result that all investors find it optimal to form portfolios containing only the market portfolio and the risk- free asset). Give some indications of how Two-Fund separation would break down if the assumptions were violated.
Number 6 please
tax a. What is b. What is 102 Part 1 Basic Concepts c. Find the value of producer surplus received by dive shops. (Hint: It may help to draw a sold beef c. How much graph.) vices increases, and that the new demand is given by Q-7,000-20P. Calculate the impact of this change in demand on the values you calcu- gain? d. What is the l e. The president d. Suppose that the demand for scuba diving...
Assignment # 1 What are the philosophical foundations of free-market ideology? 1. 2. Explain how in reality markets are and cannot be free of government intervention. What are the arguments for and against such intervention? What is meant by market failure? List six examples of such failures and explain how each example you give constitutes a market failure. What would be a remedy to each of these failures? 3. 4. In the first chapter of the textbook, you have a...
CHAPTER 6: TAXES AND SUBSIDIES 1. What is the purpose of a tax? Whas dous imposing a tax do to your behavior? What is the tax wedge? Be able to use it to determine the impact of a tax on a given market. Especially as it pertains to the price paid by the buyer and the price received by the seller. 3. If a tax is imposed, say on chewing gum, be able to show/understand how it affects the market...
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