True or false and use a graph to explain: a) can it be welfare-improving for governments to undertake investments that would not be profitable for private firms? b) when there is congestion, do you think a toll road can lead to a higher level of social welfare than a freeway, but in the absence of congestion, freeways are better than toll roads?
True or false and use a graph to explain: a) can it be welfare-improving for governments to undertake investments that would not be profitable for private firms? b) when there is congestion, do you think a toll road can lead to a higher level of social welfare than a freeway, but in the absence of congestion, freeways are better than toll roads?
Social welfare is an important economic concept in the welfare economics. In welfare economics, we study how to increase the total economic well-being of the individuals and the society. The main objective is to bring the economy near/closer to the ideal economy. Therefore, in this branch, we study the allocation of resources the maximizes the overall welfare of the economy.
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