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Explain the concept of externality in economics? Give one example of a positive and a negative externality in Australia.
Real Rigidities The New Keynesian economists rely both on nominal and real rigidities to arrive at their conclusion that nominal changes in money supply have real, and not
Factors affecting the size of National Income The size of nation's income depends upon the quantity and quality of the factor endowments at its disposal. A nation will be ri
General and Selective Credit Control These are imposed with the full apparatus of the law or informally using specific instructions to banks and other institutions. For insta
Financial engineering deals with the design of new assets. Draw the payoff (at t=1) of the following bull butterfly spread: Purchase 1 call with exercise price a Sell 2 ca
Disadvantages of the Planned System The centrally planned economies suffer from the following limitations: Lack of choice: Consumers have little influence over what is p
Describe the Optimisation of managerial economics Optimisation techniques are perhaps the most vital to managerial decision making. Given that alternative courses of action are
Q. Show the Properties of isoquants? Isoquants slope downwards to the right: It means that, in order to keep output constant; when amount of one factor is increased then the
Determinants of Demand Price elasticity of demand fluctuates from commodity to commodity. Whereas the demand of some commodities is highly elastic, demand for others is highly
Cross Elasticity Cross elasticity of demand measures the degree of responsiveness of the quantity demanded of one good (B) to changes in the price of another good (A). It is
What is optimal output rule? Optimal output rule: According to the optimal output rule, describe that profit is maximized through producing the quantity of output at that th
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