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Within analysis of perfect competition, we distinguish between the short run and the long run on the basis that use of some input factors is fixed in the short run, but variable in
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
Homework 4 Q1. Suppose a consumer has utility function (u) = xy where x and y are amounts of two commodities that this consumer consume. Suppose this consumer’s income is $120, pri
f(x1 x2,x3,x4) =min(x1/4x22/3,x3+2x4)
During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use of supply and demand diagrams, how the following markets are affected in terms of
why slopes of is and lm curves affect effectivness of fiscal and mnetary policy?
The Effects of Advertising on the Demand Curve: Advertising targets to: • Change the slope of the demand curve which means make it more inelastic. This is done by generat
Why do actinides exhibit o.s equal to the sum of the valence electrons.
1. Suppose that there is a credit market imperfection because of asymmetric information. In the economy, there are N consumers. A fraction b of consumers consists of lenders, who e
They take deposits which mean borrow money and make loans which means lend money. The interest rate they pay on the deposits is less than the interest rate they charge on their loa
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