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Thinking about modifications in the model again: Go back to the original model again, but add a marginal propensity to invest, this is, suppose that I = f ( i and Y). The MPI is defined as ΔI/ΔY and has a positive value. Will this increase, decrease or not affect the value of the government expenditures multiplier? Describe!
Q. What do you mean by Cost Function? Cost function is a derived function. It's derived from the production function that describes the efficient method of production at any gi
Individual firm and market supply curves The quantities and prices in the supply schedule can be plotted on a graph. Such a graph is called the firm supply curve. A fir
Reasons for Shift in Demand Curve Shifts in a price-demand curve may occur due to the change in one or more of other determinants of demand. Consider, for illustration, decreas
explain bain''s limit pricing theory
The Historical development of money For the early forms of money, the intrinsic value of the commodities provided the basis for general acceptability : For instance, corn, s
Question : i) Consider a discriminating monopolist is selling a product in two separate markets in which demand functions are: P 1 = 6 - Q 1 P 2 = 18 - 2Q 2 The mono
FACTORS RESPONSIBLE FOR WAGE DIFFERENTIALS WITHIN THE SAME OCCUPATION i. Differences in the environment: For example a doctor sent to North Eastern Province must be pai
A firm faces a perfectly elastic demand for its output at a price of $6 per unit of output. The firm, Though, faces an upward-sloped labor supply curve of E= 20w-120 W
Burden of the national debt The extent of the burden on a nation of public debt, depends in the first place on whether it is an external or an internal debt. The burden of th
The Microeconomic objectives of government These are the policies which are concerned with the allocation and distribution of resources to maximize social welfare. 1. Allo
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