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1. Suppose that Mr. John has the following Cobb-Douglas utility function U = 6X^2/3y^1/3 the market price of X and Y commodity are $1 and $2, respe
1. Moving from an economically inefficient to efficient allocation of resources will necessarily increase benefits by more than costs. 2. There are two demand curves for a pri
During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use supply and demand diagrams, how the following markets are affected in terms of pr
Q. What is Tradeable product? Tradeable:A product (a service or good) is tradeable if its purchaser can purchase it far away from the place where it is produced. Most goods (ot
Economic Growth: Economic Growth refers to an increase in real aggregate output (real GDP) reflected in increased real per capita income. A country is said to experience econo
summary of general equilibrium
What are externalities? Give an example of positive and negative externality and explain why the market outcomes are inefficient in the presence of externalities?
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Risk Loving - A person is a risk loving if they show a preference toward the uncertain income over a certain income having same expected value. Examples: Gambling, some
CRITIQUE OF ECONOMIC REFORMS: The critique of economic reforms should consider the actual growth rate achieved, its impact on employment and poverty reduction, its impact on l
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