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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.
Factors influencing the supply of a commodity a) Own Price of the commodity There is a direct relationship between quantity supplied and the price so that the hig
REALISM OF PERFECT COMPETITION The assumptions of perfect competition are obviously at variance with the conditions which actually exist in real world markets. Some market
How is marginal analysis lead to profit-maximizing quantity of output? Marginal Analysis leads to Profit-Maximizing Quantity of Output: The price-taking firm’s optimal outpu
External Debt Problem External debt refers to debt owing by one country to another. External debt is a more serious problem than internal debt because the payment of interest
How does economic theory contribute to managerial decisions
Schumpeter Description According to Schumpeter, a cycle represents wave like deviations in business activity from the equilibrium or trend line. There are equilibrium points an
Q. Describe Rule based forecasting? Rule based forecasting: Rule-based forecasting (RBF) is a proficient method which incorporates judgment as well as statistical techniques
Q. Optimal Input Combination for Maximisation of Output? Equilibrium conditions of the firm are identical to the above situation which is, iso-cost line must be tangent to the
The production function is Q= 20 K0.5 L0.5 Question: For the production function Q= 20 K0.5 L0.5 determine four combinations of capital and labor that will produce 100 and 200 unit
Cross Elasticity Cross elasticity of demand measures the degree of responsiveness of the quantity demanded of one good (B) to changes in the price of another good (A). It is
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