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Allocation Function
The shifting or reallocation of production property into or out of markets based on shifts in prices for the products or services produced in that market. If price moves in a technique that indicates an increase in requirement, more firms may try to enter that market and gives a supply to meet that requirement. Conversely, if price shifts in such a way that demand looks to be diminishing, several firms may choose to leave the market and direct their resources elsewhere.
Explain welfare grants and subsidies
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Demonstrate mathematically that the equilibrium condition MRS PB PA is the equivalent of the utility-maximizing rule MU AP A MU B PB .
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In the case of a tax abolition on food staples, what are the short run and long run effects?
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