« previous next »

Author Question: What are the three basic decisions that any household must make. What will be an ideal ... (Read 62 times)

jwb375

  • Hero Member
  • *****
  • Posts: 540
on: Jun 29, 2018
What are the three basic decisions that any household must make.
 
  What will be an ideal response?

Question 2

Even though a perfect price discriminator can extract all of the consumer surplus, how can it be efficient?
 
  What will be an ideal response?


bassamabas

  • Sr. Member
  • ****
  • Posts: 294
Reply #1 on: Jun 29, 2018
Answer to Question 1

Every household must make three basic decisions: (1) how much of each product, or output, todemand; (2) how much labor to supply; and (3) how much to spend today and how much tosave for the future.

Answer to Question 2

Efficiency has nothing to do with who gets the surpluses; that is, efficiency has nothing to do with whether the consumer surplus (or producer surplus) is large or small. Instead, a market is efficient as long as there is no deadweight loss. Because there is no deadweight loss with perfect price discrimination, even though the amount of consumer surplus is as small as possiblezeroand the producer surplus is as large as possible, nonetheless the market is efficient.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Throughout history, plants containing cardiac steroids have been used as heart drugs and as poisons (e.g., in arrows used in combat), emetics, and diuretics.

Did you know?

The average human gut is home to perhaps 500 to 1,000 different species of bacteria.

Did you know?

Asthma occurs in one in 11 children and in one in 12 adults. African Americans and Latinos have a higher risk for developing asthma than other groups.

Did you know?

Only one in 10 cancer deaths is caused by the primary tumor. The vast majority of cancer mortality is caused by cells breaking away from the main tumor and metastasizing to other parts of the body, such as the brain, bones, or liver.

Did you know?

Hyperthyroidism leads to an increased rate of metabolism and affects about 1% of women but only 0.1% of men. For most people, this increased metabolic rate causes the thyroid gland to become enlarged (known as a goiter).

Using the Ti plasmid and Agrobacterium tumefaciens to make transgenic plants Using the Ti plasmid and Agrobacterium tumefaciens to make transgenic plants
Basic features of the function of many excretory systems. Basic features of the function of many excretory systems.
Basic brain diagram Basic brain diagram
Basic steps in hemostasis Basic steps in hemostasis
To make an ice pack, place crushed ice in a plastic bag, bleed the air out of it, and seal it. Wrap To make an ice pack, place crushed ice in a plastic bag, bleed the air out of it, and seal it. Wrap
Each cell nucleus throughout the body contains the genes, DNA, and chromosomes that make up the ... Each cell nucleus throughout the body contains the genes, DNA, and chromosomes that make up the ...
Video: Chloroplast Structure & Light Dependent Reactions (Photosystem 1 and 2 Cyclic Electron Flow)

For a complete list of videos, visit our video library