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Explain opportunity costs using a PPF where investment goods are on one axis and consumption goods on the other.
Again, a good definition of opportunity costs linked to the notion of limited societal resources is the answer. Suppose two bundles of goods - capital and consumption goods - and maximum efficiency in the economy being attained (the economy is producing on the PPF), then any enhance in the production of investment goods will of course mean an opportunity cost in terms of quantity of consumption supplies given up.
How we constract the cost structure of firms
Explain crowding out and why it may be considered important for policy makers. Crowding out refers to how enhanced government borrowing (real borrowing!) might serve to raise i
if nominal GDP in 2002 exceeds nominal GDP in 2001, did real output rise?
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describe returns to scale and give examples of each.
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#question.contrast the long run equilibrium position of monopolistic competition firm and oligopoly.
The prevention of major swings in economic activity can be handled most easily by the
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