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A completely competitive firm faces a market price of $10 for its output X. It owns two plants, A and B, whose total costs are
TCa = 10+2x + .25X2 TCb = 15 +.4X + .1X2
Costs of Economic Growth (Increase in National Income) 1. People living in industrial towns suffer from the effects of a polluted atmosphere. 2. The manufacture of
The Social Cost of Unemployment i. For the individual, there is the demoralizing effect which can be devastating particularly when they are old. This is because as some
Problem 1: The national budget exercise is nothing more than a political exercise. Discuss. Problem 2: a. What do economists mean by the term ‘efficiency'? b. What
The Frugal Economy In the Frugal economy, households and firms look to the future, and as a result undertake both Saving and Investment. SAVING Saving is income no
T HE BANKING SYSTEM Consists of all those institutions which determine the supply of money. The main element of the Banking System is the Commercial Bank (in Kenya). The sec
Describe ramsey pricing with detailed examples
Management Decisions: An effective demand forecast assists the management to take suitable steps in factors which are relevant to decision making like plant capacity, raw-material
Mankiw Model of Nominal Rigidities There are two related reasons for which firms do not frequently change prices. First, as we saw in the discussion on menu costs, the cost
Real and nominal wages Wages are wanted only for what they will buy, real wages being wages in terms of the goods and services that can be bought with them. Nominal wages
Monetary Policy Meaning of Economic Growth: The primary function of an whether socialist or capitalist is to satisfy people maximum wants. It must produce consumer goods to make
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