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What are the advantages of leaving resource allocation to price allocation?
Ans) The 5 benefits are Neutral, Flexible, Freedom of choice, No administrative cost and lastly Diminished incentives. Distinguish among diminishing returns and diseconomies of scale. Diseconomies of scale I guess means as you make more it becomes more costly to produce. For example, you make output 1 for $2 but output 2 for $5 thus the second one needed $3 Now let us say input for output 1 had to be doubled for input 2. One land gave output 1. Output 2 required 2 lands. Then there are not diminishing returns. Though, as second land was costing $3 there was diseconomies of scale.
Tax cuts get better the economy by giving the people more spending power and higher consumer confidence, which leads to them spending more of all of their income which lead to more
Historically, the proportion of students entering a university who finished in 4 years or less was 64%. To test whether this proportion has decreased, 122 students were examined an
Collecteconomic data for three countries: Australia, China and Greece.The data is toobtainedfrom official sources as time series forthe key macroeconomic variables. These arereal G
The supply equation for widgets is P = 100 + 10QS. The elasticity of supply between quantity supplied of 9 and 11?
Explain the adjustment to the new equilibrium price from an increase in supply.
A financial manager wants to design an investment portfolio for a client. The client has $50,000 available to invest, and the planner has identified four investment options for the
compute: credit multiplier, maximum change in the money supply
Question 1: Consider a two-period, two-person pure exchange economy. Utility functions and endowments are given as follows. u1(x0; x1) = (x0x1)2 and e1 = (18; 4) u2(x0; x1) = ln x0
state and explain two factors that cause the shifts in the balance of payments curve.
What are the effects of the fiscal stimulus on the macroeconomy
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