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Problem 1:
All economies of the world can be said to be ‘mixed', to a greater or lesser degree, in that there is no economy where there is no state activity and no economy where the market has no role at all.
In light of the above statement, why do most countries choose to operate a mixed economy rather than a command or a market economy?
Problem 2:
a) Distinguish among price elasticity, income elasticity and cross elasticity of demand.
b) Discuss how knowledge of price elasticity, income elasticity, and cross elasticity might be of practical use to the owner of a supermarket.
Suppose that in an isoquant mapping, you should consider three isoquants with 1000, 2000 & 3000 units of output. The price of capital is Rs 2 a unit, and the price of labor is Rs 1
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