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The Snob Effect - If network is negative externality, a snob effect exists. * The snob effect refers to desire to own unique or exclusive goods. * The quantity demanded o
CONSUMER CHOICE INVOLVING RISK: The traditional theory of consumer behaviour does not include an analysis of uncertain situation. Von Neumann and Morgenstern showed that under
what is Microeconomics?
Q. Level of aggregate demand in economy? Demand-pull inflation takes place when there is an increase in level of aggregate demand in economy. Aggregate demand comprises five co
WORLD TRADE ORGANISATION (WTO): The International Trade Organisation (ITO), originally, was proposed to be set up along with the World Bank and the IMF on the recommendations
Utility-Expenditure Duality: Consider the minimisation of the expenditures necessary to achieve a specified utility level. The solution for qi yields the compensated demand f
Why government cannot print new currency to pay the debts? When there is deficiency of internal resources then government borrow. Government can borrow either from central ban
Why do demand curves generally slope downward? The demand curve slopes downward because in general, the higher the price of the good, the fewer people will need to buy it.
Real Interest Rate: Interest rate on a loan, adjusted for rate of inflation. Real interest rate represents real burden of an interest payment. Real interest rates should be positiv
concept of innovation theory of profit and criticism
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