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Find the highest interest rate:
There are 2 entrepreneurs, Sally and Paul. The return to their projects are given by:
To finance the project, each entrepreneur needs to borrow from a bank an initial capital of 100. The loan contract stipulates that if the project return is high, then the firms pays principal plus interests, and if the project return is low, then the bank seizes whatever value that the firm has left over. Find the highest interest rate at which Sally is willing to borrow, the highest interest rate at which Paul is willing to borrow, and the bank's expected net profit if the interest rate is 10% and 18%, respectively.
Define the generality of economic theory in the modern economics. Generality of Economic Theory An economic theory is based onto assumptions imposed onto economic environmen
Since World War II, North Korea has had a centrally planned economy in which the government makes the big decisions on how resources will be allocated. Why would you expect North K
characteristic of duopoly
using the marginal utility approach discuss how economic theory explains the optimum pattern of consumption for an individual consumer
In markets, the invisible hand allocates resources efficiently a. in all cases b. when there are positive externalities, but not when there are negative externalities c. when there
Problem : (a) With reference to the characteristics of market structure, explain why the market for powdered milk in Mauritius is an appropriate example of monopolistic compet
Point Elasticity of Demand - For large price changes (such as 20%), value of elasticity will depend upon where price and quantity lies on demand curve. - Point elasticity me
1. How does the marginal social benefit curve of a common resource compare to the marginal social benefit curve of positive externality from a mixed good? Highlight the difference
Three People choose whether to contribute a fixed amount toward the provision of a public good. This good is provided if and only if at least two of them contribute. If it is not p
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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