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How we constract the cost structure of firms
Consider the following insurance market. There are two states of the world, B and G, and two types of consumers, H and L, who have probabilities pH =0.5 and pL =0.25 (high and low
use of diagram how the price mechanism operates to allocate scarce resources. use examples to illustrate the answer.
Assume that the U.S. Department of Agriculture (USDA) administers the price floor for cheese, set at $0.17 per pound of cheese. (The price floor is formally set at $16.10 per hundr
Graph the following example and answer the questions: The United States and Japan only produce two goods. They have the same fixed resources and they are equally efficient, and bo
What should be the decent/appropriate growth rate in any country? Answer: A growth rate of among 2-3% is considered normal for mature developed countries; for LICs, 5-7% is
Mikes' preferences for consumption and leisure may be represented by the Utility function: u(C, L) = ( C-200)*(L-80) . His marginal utilities of leisure and consumption are (C-200
An economist's view of costs contains both explicit and implicit costs. Explicit costs are accounting costs, and implicit costs are the opportunity costs of an allocation of resou
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What are the possible negative consequences of economic growth in a developing country? Define economic growth as an enhance in GDP during a given time period, and then define
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