Economics

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Macroeconomic Short Answer Questions Student’s Name: Professor’s Name: Institution Affiliation: Course Title: Date: 1.2 Suppose the consumption of a good entails rather sizable spillover benefits. How might the resulting misallocation of resources be corrected? Spillover benefits refer to both costs and/or benefits that individuals or groups of people reap through the production or consumption of goods and serves, although they are these person(s) do not take part in decisions that aid the process of production or consumption. These costs and benefits result from both over or under-consumption of goods and services and over or underproduction of goods and services (Gupta, Mandal & Gupta, 2008). As a result,…show more content…
A corporate form of business enterprise has the following advantages: Legal framework A corporate business enterprise is established under a specific legal framework where laws governing the operations and functioning of the enterprise are outlined. The activities of the enterprise are monitored and therefore such an enterprise is recognized by law. This is important due to the fact that legal suits can be filed by the enterprise within the provisions of the law. Financing Sources of finances for such an enterprise are broad. Those that require a registered business enterprise are at the disposal of such an enterprise. Capital base for the enterprise is therefore broad. This can consequently impact on the asset portfolio of the enterprise, given its portfolio over time. Credibility and customer pooling Given the grounds under which such an enterprise is established, it is held to be more credible than the non-registered enterprises. On the same note, frequent monitoring and applicability of law to such an enterprise is associated with effectiveness of duty discharge. As a result, such an enterprise is likely to accumulate more and more customers with time because its validity and credibility is guaranteed by law. Corporate business enterprises have their disadvantages. They include: Registration requirements The process of corporate enterprise registration is costly and time consuming. Resources must be put in place prior to this process. On the same note,

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