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Explain the concept of externality in economics? Give one example of a positive and a negative externality in Australia.
Mankiw Model of Nominal Rigidities There are two related reasons for which firms do not frequently change prices. First, as we saw in the discussion on menu costs, the cost
I. A farmer – businessman is in a quandary as to what crop to plant in his land. He has the option to plant Crop A, Crop B, or Crop C. f the weather turns out to be good and the
Characteristics of Money Over time, therefore, it became clear that for an item to act as money it must possess the following characteristics. Acceptability If
Q. Describe Managerial and behavioural theories? It was only in 1960s that neo-classical theory of firm was disputed by alternatives like behavioural and managerial theories. M
What are the important external forces Management has to identify all significant factors which influence a firm. These factors can largely be divided into two categories. Mana
The Firm The unit that uses factors of production to produce commodities then it sells either to other firms, to household, or to central authorities. The firm is thus the uni
Q. What is Internal Diseconomies of Scale? Internal economies of scale exist only up to a certain size of the plant. Size of plant is called the optimum plant size since with t
Concept of Central bank M.H. De Kock concept of central bank is superior to that of others as it is more inclusive. His long definition of central bank includes many of the imp
USES OF NATIONAL INCOME FIGURES We need national income statistics to measure the size of the "National cake' of goods and services available for competing uses o
You own a pharmaceutical company that is specialized in the manufacture of medicine for smokers. You newly patented an innovative drug called Clealung, which drastically reduces th
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