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Author Question: Describe how the market demand curve for private goods is developed. Describe how the societal ... (Read 206 times)

londonang

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on: Jun 29, 2018
Describe how the market demand curve for private goods is developed. Describe how the societal demand curve for public goods is developed. Explain why each curve is developed the way it is.
 
  What will be an ideal response?

Question 2

Money market mutual funds sell shares to investors and use the money to buy
 
  A) overseas assets through foreign direct investment.
  B) short-term securities.
  C) foreign currency.
  D) mortgage-backed securities.


Anna

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Reply #1 on: Jun 29, 2018
Answer to Question 1

To develop the market demand curve for private goods, sum all the individual demand curves horizontally. To develop the societal demand curve add individual demand curves vertically. The quantity of private goods produced is based on total quantity demanded at various prices. As a result, each individual's demand at a given price is added to another individual's demand at that same price. For public goods, only one level of output can be produced. The task is to find out how much each member of society is willing to pay for that quantity. As a result, the individual demand curves must be added vertically.

Answer to Question 2

B


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londonang

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Reply #2 on: Jun 29, 2018
Thank you :)


Anna

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Reply #3 on: Jun 29, 2018
Happy to help you


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