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1. Through graphs describe the relationship between the price, P, and the average total cost, ATC, for a firm in perfect competition when it earns an economic profit; earns a normal profit/ zero economic profit and; incurs an economic loss? Why can't the firm continue making economic profits in the long run?
2. a. To maximize utility, why does a consumer consume the combination of goods that equates marginal utility per dollar from the different goods rather than just equating the marginal utility of the different goods?
b. Why does gold, which is a relatively nonessential item, have a higher price than water, which is essential to life?
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Explain the Demand Pull Inflation Demand Pull Inflation: Occurs when aggregate demand exceeds aggregate supply. If there is an excess level of demand in the economy, this w
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Deficiency of Vitamin A Deficiency of Vitamin A has been found to impose adverse effects on roughly one third of the children below the age of five around the world. It has also be
1. Suppose that there is a credit market imperfection because of asymmetric information. In the economy, there are N consumers. A fraction b of consumers consists of lenders, who e
THEORY OF CUSTOMS UNION: A customs union is an association of two or more countries to encourage trade. The countries making such an arrangement agree to eliminate tariffs and
define for whom to produce
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Plot the demand schedule and draw the demand curve for the data given for Marijuana in the case above.
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