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Homework answers / question archive / Explain how international trade results in a country consuming beyond its ppf
Explain how international trade results in a country consuming beyond its ppf.
2. Define the two characteristics of a public good. What is the free-rider problem? Will a competitive market be efficient? Explain. Z is a public good (e.g, a dam). Person 1’s values of Z is $10. Person 2’s value is $15. Person 3’s value is $20.If the market price is 25 dollars, does anyone buy it privately (the competitive outcome)?Derive the social demand (or marginal social value) of Z?Is the competitive output efficient? Explain using the concept of Pareto Efficient Exchange.
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