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The optimal stimulation level (OSL) is the amount of stimulation individuals seek in life. [1] In theories which consider human actions will be affected by motivational tendencies, the concept that for achieving a favorable stimulation level, social practices stimulated by pure desire plays a significant role.
The efficient level of capital income tax in the steady state has been studied in the context of a general equilibrium model and Judd (1985) has shown that the optimal tax rate is zero. [6] However, Chamley (1986) says that in reaching the steady state (in the short run) a high capital income tax is an efficient revenue source. [7]
The optimal level of a public good is that quantity at which the willingness to pay for one more unit of the good, taken in totality for all the individuals is equal to the marginal cost of supplying that good. Lindahl tax is the optimal quantity times the willingness to pay for one more unit of that good at this quantity. [1]
Optimal tax theory or the theory of optimal taxation is the study of designing and implementing a tax that maximises a social welfare function subject to economic constraints. [1] The social welfare function used is typically a function of individuals' utilities , most commonly some form of utilitarian function, so the tax system is chosen to ...
Since it is not possible to find the optimum output level, it is not possible to find the optimum Pigouvian tax level to achieve that optimum. In the end, Baumol argues that the best solution is to set a minimum standard of acceptability for negative externalities and create tax systems to achieve those minimum standards.
The widely supported theory of optimal flow presents a less simplistic understanding of arousal and skill-level match. Reversal theory actively opposes the Yerkes-Dodson law by demonstrating how the psyche operates on the principle bistability rather than homeostasis .
The investor's optimal portfolio is found at the point of tangency of the efficient frontier with the indifference curve. This point marks the highest level of satisfaction the investor can obtain. This is shown in Figure 3. R is the point where the efficient frontier is tangent to indifference curve C 3, and is also an efficient portfolio ...
The optimal output, shown in the graph as , is the level of output at which marginal cost equals marginal revenue. The price that induces that quantity of output is the height of the demand curve at that quantity (denoted ).