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1. suppose the economy has autonomous investment & the rate of savings depends only on income.what will be slope of is curve?
2.Agriculture subsidies are given by almost all countries with the objective of raising the income of farmers .Under the US "deficiency payment" system ,a price above the free market price p*,is guaranteed by paying to the farmer the difference b/w the market clearing price & p*.Alternatively,the govt (as in india) can buy the farmers production till price is pushed to p* level. show that which scheme will cost more depend on elasticity of dd for product ?
3.ACCORDING TO ANTI-POVERTY PROGRAMME A PURCHASE UP TO 10 KG OF RICE IS SUBSIDIZED & quantities purchased in excess of 10 kg are taxed.if a family is neither better off nor worse off as a result of the programme,show that it receives a net non negative subsidy.
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