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Problem: Long-Run Labor Demand and Factor Substitutability Suppose there are two inputs in the production function, labor (L) and capital (K), which can be combined to produce
The gap between theory and practise and the role of managerial economics: We have noted above that application of theories to the process of business decision making contributes a
THE ACCELERATION PRINCIPLE Suppose that there is a given ratio between the level of output Y t at any time t , and the capital stock required to produce it K t and that
PER CAPITA INCOME AND INTERNATIONAL COMPARISONS Per capita income figures can also be used to compare the standards of living of different countries. Thus if the per capita in
What is producer surplus? “The more the competition among the sellers, the less the producer surplus enjoyed by the producers” – do you agree with the statement. Justify your answe
The Circular Flow of Income and Expenditure This is an economic model illustrating the flow of payments and receipts between domestic firms and domestic households. The househo
how to solve problems using derivatives ?
The following contains cost and benefit information for two different alternatives for a w capital investment in computerized process technologies to control the process at a manuf
Q. What is External Diseconomies? The expansion of an industry is likely to generate external diseconomies that raise the cost of production. An increase in the size of industr
Perfectly Elastic Supply Supply is said to be perfectly or infinitely elastic if the price is fixed at all levels of demand. The demand curve has been shown in the above diag
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