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Change in the price of a related good:Goods relate to each other in two ways. Goods are either complements or substitutes.Complementary goods are goods with joint demand. They are needed jointly before a want could be satisfied, e.g., camera and film. With complementary goods, a steep rise in the price of one will lead not only to a fall in its consumption but a fall in the consumption of the other good too. A fall in the price of one good would lead to an increase in the demand of the other. Substitute goods on the other hand, are goods that only one is needed to satisfy a want/need (not both). For substitutes, a fall in the price of one leads to a decrease in demand for the other and an increase in the price of one leads to an increase in the demand for the other, ceteris paribus.
Problems Using Point Elasticity - We may need to compute price elasticity over portion of demand curve instead of at a single point. - The price and quantity used as base wi
The drawbacks of a mixed economy actually depend on how "mixed" it is. For instance, if it is mixed more towards a free-market, there is little regulation (some may see this as a g
MONOPOLISTIC MARKET
Why in 1996 did the BEA switch to calculate real GDP using the "chained-dollar method" from the "constant-dollar method"? The BEA made the switch from the constant-dollar metho
b) Why is monopoly considered to be generally against public interests, and what policy instruments can be used to regulate monopolies?
Look at a recent copy of a newspaper . a. What is the top economic news story? With which of the big questions does it deal? (It must deal with at least one of them and might d
If the MU of the 1st unit consumed = 75 utils, and the TU of consuming 2 units is 130 utils, what is the marginal utility of the second unit?
The Competitive Firm - Price taker - Market output (Q) and firm output (q) - Market demand (D) and firm demand (d) - R(q) is straight line Demand and Marginal Re
identify which curve (demand or supply) will be affected?
The Long-Run Supply of Housing * Scenario 1: Owner-occupied housing - Suburban or rural areas - National market for inputs * Questions - Is this an increasing or co
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