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1. Consider a world with two assets: a riskless asset paying a zero interest rate, and a risky asset whose return r can take values +10% or –8% with equal probability. An individua
Duality Theorems: The relationship between the direct and indirect utility functions may be described by a set of duality theorems. The following illustrative theorems are pro
define perspective of managerial economics.
use of diagram how the price mechanism operates to allocate scarce resources. use examples to illustrate the answer.
what is theory of product pricing?
The benefits of increased openness in trade. Narrowly defined, trade openness is lowering trade barriers - facilitating increased imports - whereas focusing on international ex
Economies of Scale The reduction in the cost of each additional unit produced as all factors of production increase. Factors contributing to economies of scale include discoun
a consumer consumes only two goods x and y is in eqillibrium price of x falls explain the reaction of consumer through utility analysis
Elasticity is a term broadly used in economics to signify the “responsiveness of one variable to changes in to another.” Types of Elasticity can be explained as follows: Th
reason for kinked demand curve
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