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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.
The rest of the world in the cross model Imports Im(Y) depends positively on Y in the cross model In the classical model, imports doesn't depen
The real interest rate Interest rates and inflation Suppose you have 1 million on 1st January 2008. A basket of goods and services similar to the CPI basket costs 100,000.
Do we get paid nominal or real wage?
1) Suppose you are dealt two cards from a standard deck of playing cards. a) What is the probability of being dealt a pair of aces? b)There are 13 possible pairs possible (Ac
Determine the example of Currency inside banks is not money An example may also illustrate this important fact: Eric has 100 euro - this amount is obviously part of the
Given the following: Airbus Boeing Demand P = 182.868 - 0.0003Q P = 198.6592 - 0.00013Q TVC Curve TVC = 104.8822Q - 0.001Q^2 + 0.09Q^3 TVC = 25.8678Q - 0.00023Q^2 + 0.4Q^3 In
The market demand for a factor The market demand curve for any input is not simply the horizontal summation of the individual demand curves of all the firms. This is due to th
Marginal Propensity to save (MPS) is the ratio of change in total saving to change in total disposable income. Symbolically, MPS = ?S/?Y For example, total
This is a maple assignment, but it is also a research assignment. You will have to consult earlier worksheets, textbooks, and perhaps the internet to answer some of these questio
Suppose that the yield curve is flat at 5% per annum with continuous compounding. A swap with a notional principal of $100 million in which 6% is received and six-month LIBOR is pa
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