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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.
When does deadweight loss occur to society? Applying consumer and producer surplus the efficiency costs of a tax: A tax causes a deadweight loss to society, since less the g
what is non- collusioligopoly and how its price and output is determined
Principle Agent Problem [Dealing with hidden action] Assume that the employer (principle) wants its employee (agent) to work hard [You can safely assume that this maximizes th
Ask questA rmuses 4 inputs to produce 1 output. The production function is f (x 1 ; x 2 ; x 3 ; x 4) =minfx 1 ; x 2 g + minfx 3 ; x 4 g.ion #Minimum 100 words accepted#
1. Cost minimizing firms must be profit maximizing as well. False, why??
how to map the curves
What should be the decent/appropriate growth rate in any country? Answer: A growth rate of among 2-3% is considered normal for mature developed countries; for LICs, 5-7% is
what is the functions of commercial bank ..
Problem: (a) Distinguish between fiscal and monetary policy, giving examples where appropriate. (b) Explain how fiscal and monetary policies might be used by a government
b) Sally’s firm produces granola bars with a fixed cost of 10 (this cost is already sunk). Her variable cost function is VC = q2 + 2q. Assuming the market for granola bars is comp
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