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The neo-classical view
The neo-classical view is that market forces are the best directors of the economy. Positive attempts by the government it is argued inevitably make things worse. The correct posture for fiscal policy, therefore, is simply to minimize the role of government, thus leaving the largest proportion of the economy possible to be run by the market forces.
A promoter decides to rent an arena for concert. Arena seats 20,000. Rental fee is 10,000. (This is a fixed cost.) The arena owner gets concessions and parking and pays all other e
PUBLIC SECTOR BORROWING REQUIREMENT (PSBR) Public Sector Borrowing Requirement (PSBR) is the amount which the government needs to borrow in any one year to finance an excess e
Electron Control, Inc., sells voltage regulators to other manufacturers, who then customize and distribute the products to quality assurance labs for their sensitive test equipment
Asuume there are two inputs in the production function, labor & capital, and these two inputs are perfect substitutes. The existing technology permits one machine to do the work of
Perfectly Elastic Supply Supply is said to be perfectly or infinitely elastic if the price is fixed at all levels of demand. The demand curve has been shown in the above diag
Question 1: (a) Describe how asymmetric information influences the price system and resource allocation. Provide examples to support your answer. (b) Managerial decision-ma
Interest rates Decreasing the rate of interest may not encourage investment but increasing the interest rate tends to lock up liquidity in the financial system.
Explain the short-run production function with one variable input with the help of assumed figures. Clearly indicate the three stages of physical product, using table and graphs.
Bank of Issue The central bank enjoys the monopoly of bank note issue i.e. no bank other than the central bank is authorised by law to print currency notes. Printing of paper
Problem 1: a) Explain what is meant by ‘price discrimination' and what are the different types of price discrimination. b) Under what conditions is it possible and profitabl
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