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Laws of returns to scale alludes to the long-run analysis of the laws of production. In the long run, output can be increased by varying all factors. So in this section we study th
The Economics of Population Population issues became matters of economic concern when it became increasingly apparent that the problem of excess population may be a serious ob
Consumer Equilibrium To demonstrate the consumer's equilibrium i.e. the point at which the consumer maximizes utility with a given budget, we need to combine the indifference
The Barcelona Football Club is considering the signing of a player of international fame. The problem is that the player has a reputation for having a weak knee. The probability th
Assignment
PUBLIC SECTOR BORROWING REQUIREMENT (PSBR) Public Sector Borrowing Requirement (PSBR) is the amount which the government needs to borrow in any one year to finance an excess e
ChoppinAxe is a little Swedish firm that produces wood planks and operates in a perfectly competitive market. Each firm in the market has the following total cost function:
1. What is the difference between a static (master) budget and a flexible budget? Ans: static budget is where a budget doesn't change a volume changes. An example could be th
The pigou effect, also called the real balance effect, is named after the well known Cambridge school economist Arthur Cecil pigou who had first clearly formulated the relationship
Disadvantages of a Free Economy The free market gives rise to certain inefficiencies called market failures i.e. where the market system fails to provide an optimal allocation
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