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Causes There are a number of explanations of the business cycle but changes in the level of investment seem to be the most likely. In the simplest Keynesian model an increase
Measuring Point Elasticity on a Linear Demand Curve To explain the measurement of point elasticity of a linear demand curve, let's suppose that a linear demand curve is given b
Disadvantages The effect on incentives High progressive tax makes work and extra effort become less valuable. The effect on the willingness to accept risk
Basic textbook models, such as the Mundell-Fleming model, say that capital inflow happens due to the domestic interest rate being higher than the world interest rate, and therefore
Q. What do you mean by Theory of Firm? Microeconomics especially the theory of firm, assumed importance and attracted considerable attention in the early 20 th century. This sh
FUNCTIONS OF CENTRAL BANK Economists and financial experts lack in unanimity about the functions of a central bank. According to Kisch and Elkin, the essential function of a c
Blowing Safety Co. P/L manufactures safety parachutes for the airline industry. These are sold directly to the airline companies. Management expects to manufacture and sell around
Legal Sanction: A monopoly as stated above may be the result of a government sanction. The government of a country may legally permit a private monopoly or monopoly in the public s
For all regular goods, income elasticity is positive though the degree of elasticity fluctuates as per the nature of commodities. Consumer goods are generally categorised under thr
Discuss the full cost pricing and marginal cost pricing method. Explain how the two methods differ from each other.
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