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Change in consumer income:A change in consumer income may bring about a change in the quantity demanded of a good or service. However, the direction of change in quantity demanded will depend on the type of commodity in question. For a normal good, the quantity demanded might increase when consumer income increases and quantity demanded might fall when consumer income falls, ceteris paribus. Therefore, inferior goods are those goods that we consume more when we are worse of financially and less when we are better of. For instance who would want to buy “second hand” goods when he becomes richer? For a necessity, a change in consumer income may not affect quantity demanded.
Distinguish among the terms of trade and the balance of trade for a country. Definition of terms of trade a) The amount of a given amount of export goods essential to buy
Depreciation T ax Shield The decrease in corporate income taxes suitable to the deductibility of depreciation from the firm's taxable earnings. Although depreciat
Secondhand smoke globally kills more than 600,000 people each year, accounting for 1 percent of all deaths worldwide, according to a new study. . . . Researchers estimated th
Determine Optimal Price, Quantity and Economic Profit A firm has a demand function P = 200 – 5Q and cost function: AC=MC=10 and a potential entrant has a cost function: AC=MC
Marvelous Marvin spends his money on muffins (m) and a composite good (c) (whose price you may assume is $1 throughout this problem). Marvin's utility is U = m + c and his income (
What are the 2 approaches in which results into a higher satisfaction?
Economics; Different Perspective ? Economics is the knowledge of the choices taken by people who are faced with scarcity. ? Scarcity is a condition
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For each of the following scenarios, you use a SS & DD diagram to demonstrate the effect of a given shock on equilibrium price and quantity in specified competitive market. Explain
Explain the graph as their is an increase in income
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