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Derivation of compensated demand curve: Hicksian compensated demand function for x 1 is given by x 1 =x 1 (p 1 , p 2 , U), where Hicksian compensated demand curve for a good
when price falls
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
Think of the Golden Ball game. Now player 1 is money-minded and jealous, and player 2 is very good-hearted, so the payoff matrix is follows: Playe
Engel Curves -Engel curves relate quantity of good consumed to income. -If good is a normal good, Engel curve is sloping upward. -If good is an inferior good, the Engel c
Which of these will be included in US GDP for 2005? a) A car produced in Japan in 2005 and sold in the US in 2005 b) A car produced in the US in 2004 and sold in Japan in 2005 c) A
Why is it so difficult for government to achieve all macro objectives simultaneously? Specifically showing possible trade-offs i.e. a) Stimulatory policies which enhance AD
Factors determine the price elasticity of supply: The price elasticity of supply varies widely across different products. Some products have more leastic supply, while others
what is budget line?show the shift in the budget line
Wage Differentials: Market structure alone does not account for all of the differences in wages and employment. Market wage differentials arise from various other sources, includin
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