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NON-ACCELERATING INFLATION RATE OF UNEMPLOYMENT During 1970s economists encountered a puzzle in the sense that inflation and unemployment data did not fit into the Phi
INDIRECT TAXES These are imposed on an individual mostly producers or traders but they can be passed on to be borne by others usually the final consumers. They can also be de
williamson model and managerial discretion about its objective and statement of problem
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 neo-classical view The neo-classical view is that market forces are the best directors of the economy. Positive attempts by the government it is argued inevitably make th
Individual firm and market supply curves The quantities and prices in the supply schedule can be plotted on a graph. Such a graph is called the firm supply curve. A fir
DIFFERENTIALS AND DISEQUILIBRIUM In a free enterprise system, workers aim at maximizing their wages. Hence, it would be expected that workers would move form low-paying indus
Structural Unemployment The decline of the highly localized industry due to international trade causes great problems of regional (structural) unemployment. If it would take
Danger of over-specialising A country may feel that in its long-term interests it should not be too specialized. A country may not wish to abandon production of certain
Let Consider the following (familiar) equation which estimates the number of hours of sleep / year that someone gets as a function of hours worked / year (total work), education (
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