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The Cost Minimizing Input Choice
- Assumptions
- R = depreciation rate + interest rate
- Question
* The Isocost Line
- C = wL + rK
- Isocost: A line which shows all the combinations of L & K which can be purchased for same cost
- Rewriting C as linear:
is the ratio of wage rate to rental cost of capital.
* This shows the rate at which capital can be substituted for labor with no change in cost.
explain the relationship between ATC,AVC and MC by using diagram
(a) Describe clearly how the interest rate is determined in: (i) Loanable Funds Framework; and (ii) Liquidity Preference Framework. (b) According to Liquidity preference
Economies of Scope The ability of a organization to decrease its unit costs by producing two or more products or services that involve complementary skills, experience and
The demand curve for gasoline is P = 200 - 10Q. a. Find the elasticity of demand for a quantity of 8. Does this number imply that quantity demanded is sensitive to price chan
Policy: Post-Communism Demolition of the Berlin Wall and take-down of the Iron Curtain hasn't significantly improved the situation in what are optimistically and euphemisticall
Tariff: A tariff is a tax imposed on the purchase of imports. It is generally imposed in order to stimulate more domestic production of the product in question (rather than meeting
ref article :http://www.economist.com/news/finance-and-economics/21587795-if-congress-fails-lift-limit-americas-debts-consequences-are a.assume that the debt ceiling crisis
Foreign Direct Investment: It is an investment by a company (based in one country) in an actual operating business, including real physical capital assets (such asmachinery, buildi
A monopolist''s demand curve is P=100-2q. find his MR function. at what price is MR zero
find equilibrium level of income
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