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Short run equilibrium - Perfect competition: In the short-run, the perfectly competitive firm maximizes its profit by producing output where MC=MR=P. This is shown in the diag
Floating exchange rates There are two basic systems that can be used to determine the exchange rate between one country's currency and another's: a floating exchange rates (al
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Exchange Rate Policy: After the second amendment to the Articles of Agreement of IMF which came into effect on April 1, 1978, every member is free to choose its own exchange r
The Technology of Production * The Production Process - Combining inputs or the factors of production to attain an output * Categories of Inputs (or the factors of prod
Comparative Advantage:A theory of international trade which originated with David Ricardo in early 19th Century and is maintained (in revised form) within neoclassical economics. T
9. The average supernormal profit for the firm is
note for assignment
Inverse Demand Function: If variable factor prices changes, then the isocost line will tilt and consequently, the optimal factor requirement will be different. Suppose the wage rat
Draw a Production Possibilities Frontier with consumer goods on the vertical axis and capital goods on the horizontal axis. Show how the PPF will shift if the production of capita
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