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Evaluation of the WTO: The WTO is different from and an improvement over the GATT in the following respects: • The WTO is more global in its membership. • The WTO ha
Indirect Utility Functions: Let qi denotes commodity i and pi is the price of that commodity. Let y denotes money income of the consumer. Suppose vi = pi/y. The budget constra
Explain how automatic (fiscal) stabilisers may help to lower fluctuations in the business cycle. Definition of automatic stabilisers as built-in to the system in terms of trans
Average Fixed Cost (AFC): AFC is the fixed cost per unit of output. AFC = TFC/y Since the TFC is constant throughout the short run, as y increases AFC will decline. Therefore
what the third degree price discrimination with case study of two successfull and unsuccessfull cases?
Government increases the taxes on car ownership. Explain the possible market outcomes of such a decision. As this is a tax paid by owners, and therefore not levied indirectly
When does deadweight loss occur to society? Applying consumer and producer surplus the efficiency costs of a tax: A tax causes a deadweight loss to society, since less the g
The price at which output is sold in a perfectly competitive market is determined by
Explain about the optimal consumption rule. The optimal consumption rule: While a consumer maximizes utility, the marginal utility per dollar spent should be similar for all
different types of production funtion and curve given by different economist
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