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Q. Show the uses of income elasticity? A few significant uses of income elasticity are as follows: First, concept of income elasticity can be used to approximately compute t
DIFFERENTIALS AND DISEQUILIBRIUM In a free enterprise system, workers aim at maximizing their wages. Hence, it would be expected that workers would move form low-paying indus
How does economic theory contribute to managerial decisions?
State the Basis of business policies Managerial economics is the founding principle of business policies. Business policies are prepared based on studies and findings of manage
The Budget line and its economic interpretation The indifference curve shows us consumer preferences but it does not show us the situation in the market place. Here the consu
Burden of the national debt The extent of the burden on a nation of public debt, depends in the first place on whether it is an external or an internal debt. The burden of th
Refer to above figure. Albania refused to engage in international trade for ideological reasons. To maximize its economic welfare it would choose to produce at which point in the d
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
Q. Show the Isoquant touching axis? Isoquants do not intersect: By definition isoquants such as indifference curves, can never cut each other. If they cut each other it will
Explain Managerial economics according to Mote and Paul Haynes, Mote and Paul: "Managerial economics refers to those characteristics of economics and its tools of analysis mos
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