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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.
Production Function for Wheat * Farmers should choose between a capital intensive or labor intensive technique of production. Isoquant Describing Production of Wheat
Average Product (AP) of a Factor: The productivity of a factor is often seen in terms of its average contribution. Although not very important in the theoretical discussions,
Factors Shifting Supply Curve -
Point elasticity: It refers to measurement of elasticity on a point On a demand curve. Point elasticity helps in measuring elasticity where change in price and quantity is infinite
Perfectly Competitive Markets * Characteristics of Perfectly Competitive Markets 1. Price taking 2. Product homogeneity 3. Free entry and exit * Price Taking
graphical illustration describing the influence of an increase in immigrants on the market supply of labour
scope of microeconomics
Assignment: Externalities •Consider the following scenario: The city council has just approved the construction of a water park in your town. As city economist, you are responsible
Credit Squeeze:At times private banks become reluctant to issue new credit andloans, frequently because they are worried about risk of default by borrowers. This is common at the t
Determine the profit maximizing price and quantity A firm has segmented its market into the following demand functions: P1 = 500 – 50Q P2 = 500 – 20Q with a cost fu
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