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a) What do you understand by equilibrium National Income and to what extent is economic growth beneficial to an economy?
b) Explain using both diagrams and mathematical tools, why a 20% increase in investment leads to a higher percentage increase in National Income?
c) The best way to allocate scarce resources is by treating consumers as "kings". Discuss.
d) Differentiate between public and merit goods and explain using concrete examples, why the provision of both types of goods, needs government intervention.
Using the discounting principle calculate the present value of an annuity of five years at Rs. 500 payments made at the end of each of the next five years at 10% interest. stion..
Utility Analysis or Cardinal Approach: The Cardinal Approach to the theory of consumer behavior is based upon the concept of utility. It assumes that utility is capable of meas
explain the law of demand
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Advantages of Product Differentiation We can distinguish between those advantages for the firm itself and those for the consumer: a. For the firm. i.
Uses of Indifference Curve Analysis Indifference curve analysis is useful when studying welfare economics as follows: They are used to indicate the amount of income and
Suppose you have estimated the following demand function for the product you sell: Q = 5 - 0.2P At what price will the demand for your product be unitary elastic? (Hint: B
Assume a floating exchange rate system. The Fed pursues an expansionary monetary policy. Draw how this would look on the graphs below. Mark the new equilibriums. Complete the table
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