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The marginal approach to profit maximization means that a firm should produce until a. marginal revenue equals zero b. marginal revenue equals marginal costs c. marginal cost becomes negatively sloped d. marginal revenue equals price e. price equals average total cost.
Address the following issues concerning technological and strategic barriers to entry. (a) Explain the role of economies of scale and (long run) fixed costs as technological bar
Fiscal policy is the program of government’s with respect to the amount and composition of (i) expenditure: the purchase of commodities and services, and spending in the form of su
1. Consider two projects. The first project pays benefits of $90 today and nothing else. The second project pays nothing today, nothing one year from now, but $100 two
Definition of Exchange rate The exchange rate is stated as the price of one unit of currency in terms of other currency. If one euro costs 1.5 USD then 1 USD costs 1/1.5 = 0.66
Q. What do you mean by multiplier effect? Loans and deposits in banks give rise to a significant multiplier effect. We use a simple instance to explain this effect. Consider th
Q. Explain Reversed Say's Law? In the cross model, supply should instead follow demand. Cross model not only rejects Say's Law, it turns it entirely upside down. In the cross m
What is Inherent Limitation?
The marginal approach to profit maximization means that a firm should produce until a. marginal revenue equals zero b. marginal revenue equals marginal costs c. marginal cost becom
Question 1: Consider a two-period, two-person pure exchange economy. Utility functions and endowments are given as follows. u1(x0; x1) = (x0x1)2 and e1 = (18; 4) u2(x0; x1) = ln x0
Q. Show the investment function in the IS-LM model? The investment function in the IS-LM model Investment was an exogenous variable in cross model owing to the fact that
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