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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.
A company a product using labor (L) and raw material (R) with Q = 80L^0.2 R^0.8. If labor costs $20 per hour and raw material $40 per unit, what is the optimal combination (least c
explain the main criteria for classifying firms into industries.which criteria serve the better and why?
Ask quesIn your own words describe how a market would adjust in situations of: a) Excess Demand b) Excess Supply c) Equilibrium As a follow up you might think about what effects
Critically appraise the IS-LM and the AD-AS models as analytical tools in explaining the macro-economy (the business cycle). In preparing your essay, please think about the followi
Suppose a government uses an expansionary fiscal policy to get out of a recession. Use the IS/LM model and the IS-PC-MR model to explain what monetary policy to pursue.
As a consumer increases the consumption of any one commodity, marginal utility of the variable commodity must eventually decline."Illustrate the statement. Illustrate law of dem
use of diagram how the price mechanism operates to allocate scarce resources. use examples to illustrate the answer.
Monopoly and Oligopoly help?!? 1. Your firm sells a perfume. The daily demand for your perfume estimated by your economists is given by P=150-5Q Your marginal cost is constant at $
what is microeconomics
The basic concepts of price theory
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