Explain how you could use the Production Possibility Model to represent the US Economy during 2008 –2010.
1. What is the difference between private and social costs?
2. How can the government intervene to force consumers to internalize external costs associated with: a. negative externalities? b. positive externalities?
3. Differentiate between public good and common resources.
4. What are the advantages of a flat tax system?
Abby’s reservation price for working in a risky job is $5 per hour while Rudy’s reservation price for working in a risky job is $8 per hour Characterize Abby and Rudy’s job selections if safe jobs pay $12 per hour and risky jobs pay $18 per hour