Please answer the following questions: 1) Market outcome leads to efficiency- explain. Why government intervention may...

 

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Please answer the following questions: 1) Market outcome leads to efficiency- explain. Why government intervention may lead to inefficiency in the society? - explain. 2) Consider a scenario in which the road in front of your home, which everyone uses, is unkempt and flooded due to rainfall. Everyone desires that it be repaired and cleaned up, but this is not occurring. Some individuals faltered with their initiatives. Explain now why this market failure is occurring. What factors contributed to the market failure in this instance? 3) Consider the following hypothetical situations for two countries: Bangladesh and China both countries can produce mobile phone and RMG with their existing resources. Bangladesh can produce 10 million mobile phone and 12 million RMG. On the other hand, China can produce 10 million mobile phone and 30 million RMG. Bangladesh consumes 5 million mobile phone and 8 million RMG, on the other hand China consumes 3 million mobile and 10 RMG. There is a possibility that instead of producing both commodities, each country may specialize with only one commodity and trade each other and still have gains from trade. Now, considering the above situation, answer the following questions using graph and calculation: (i) Which country has comparative advantage on which commodity? (ii) which country will specialize on which commodity? (iii) What would be the grain from trade if the country specializes in any commodity? Please answer the following questions: 1) Market outcome leads to efficiency- explain. Why government intervention may lead to inefficiency in the society? - explain. 2) Consider a scenario in which the road in front of your home, which everyone uses, is unkempt and flooded due to rainfall. Everyone desires that it be repaired and cleaned up, but this is not occurring. Some individuals faltered with their initiatives. Explain now why this market failure is occurring. What factors contributed to the market failure in this instance? 3) Consider the following hypothetical situations for two countries: Bangladesh and China both countries can produce mobile phone and RMG with their existing resources. Bangladesh can produce 10 million mobile phone and 12 million RMG. On the other hand, China can produce 10 million mobile phone and 30 million RMG. Bangladesh consumes 5 million mobile phone and 8 million RMG, on the other hand China consumes 3 million mobile and 10 RMG. There is a possibility that instead of producing both commodities, each country may specialize with only one commodity and trade each other and still have gains from trade. Now, considering the above situation, answer the following questions using graph and calculation: (i) Which country has comparative advantage on which commodity? (ii) which country will specialize on which commodity? (iii) What would be the grain from trade if the country specializes in any commodity?

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1 Market Outcome and Efficiency Market outcomes tend to lead to efficiency when they are characterized by competitive markets where supply and demand determine prices and allocate resources This effic... View the full answer