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1. Define the concept of opportunity cost in your own words. Given an example from your own life of the opportunity cost of a decision (do NOT use classroom examples). Explain why
What are the possibilities of returns to scale in production technology? Three possibilities are there as: technology exhibits (a) constant returns to scale; (b) decreasing ret
What is Economics Trade Analysis?
RATIONAL EXPECTATIONS AND ECONOMIC THEORY : We assumed above that the role of economic theory is not to provide quantitative predictions about the future. Suppose we assume ins
Suppose you own a home remodeling company. You are currently earning short-run profits. The home remodeling industry is an increasing-cost industry. In the long run, what do you ex
Interest rate sensitivity can also be understood from another perspective. The total cost of a commodity is not just its price, but also what must be paid to borrow money to purch
CURRENCY UNIONS AND OPTIMUM: This Section explains the working of monetary unions and common currency areas. The Section also examines the case for and against optimum currenc
Why do demand curves generally slope downward? The demand curve slopes downward because in general, the higher the price of the good, the fewer people will need to buy it.
The Competitive Firm - Price taker - Market output (Q) and firm output (q) - Market demand (D) and firm demand (d) - R(q) is straight line Demand and Marginal Re
Conditionality: International financial institutions (such as World Bank andInternational Monetary Fund) usually attach strong conditions to emergency loans they make to developing
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