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Flossy has a quasi-linear utility function, 16q1^0.5 + q2. The price of good 1 is fixed at one. Thus, Flossy's budget constraint is q1 + p2q2 =Y, where Y denotes income. 6.1 Compute the interior solution. 6.2 Compute the interior solution where q1 > 0 and q2 = 0. 6.3 Under what conditions on prices and income is the corner solution obtained?
Q. Define market for overnight loans? The market for overnight loans Overnight interest rates are rates for loans over a single night - these are the shortest of all inte
Regional Trading Arrangements: You have seen in earlier Units that India has been playing an active role in WTO discussions. While Hong Kong WTO Ministerial has saved and kept
Define the individual consumer surplus and total producer surplus. Individual consumer: Individual consumer surplus is the net profit to an individual buyer through the purc
Q. Money market with inflation and constant money supply growth? If π M = π and π e = π, both IS- and LM-curve will be fixed. Figure: The money market with inflatio
a good is classified as inferior if a. consumers buy less when the price rises b. consumers buy less when the income rises c. consumers buy less when the price falls d.
In a particular month, the labor force is 130 million, there are 9.1 million unemployed workers, the job -losing rate is 3% per month, and the job-finding rate is 40% per month. Ho
Define the Consumer Prices Index Every month, the Office for National Statistics (ONS) collects information on about 120,000 prices for a 'shopping basket' of about 650 goods a
Explain demand management of Keynesian economists The demand management of Keynesian economists of 50's and 60's is attacked by free-marketers for ignoring the importance of s
A significant argument for the augmentation has to do with concept of money illusion. Money illusion means that you care about nominal rather than real amounts. Imagine that your s
Suppose the demand for bread is D(p), where dD/dp Illustrate equilibrium with price on the Y-axis and quantity on the X-axis in which the t > 0. Show the economic incidence
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