Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
ORDINAL THEORY:
INDIFFERENCE CURVE APPROACH In indifference curve approach consumer is assumed to be rational, so that consumer's objective is to maximise her utility by choosing a commodity bundle among all other available commodity bundles (under budget constraint) where total utility ('U') depends on quantity consumption given her taste and preferences. Therefore, in a two-commodity world (say x1 and x2) utility function is given by U = U (x1,x2) and it depends on taste and preferences of the consumer, which is specified by axioms given below:
Axiom of reflexiveness: Consumer's choice is reflexive. Implication: Weak preference relation is denoted by 'R'. Suppose there are two goods x1 and x2 and suppose x1 is weakly preferred to x2 i.e., x1Rx2 which implies that either x1 is strictly preferred over x2 (it is denoted by x1Px2) or x1 is indifference to x2 (it is denoted by x1Ix2), where 'P' and 'I' implies strict preference relation and indifference respectively. The set constituted by all commodity bundles or vector is known as commodity set (X). Any one commodity bundle is denoted by 'x' is weakly preferred (i.e., either strictly preferred or indifferent) over any other commodity bundle (i.e., in respect to 'x'). Therefore, we have xRx. Clearly, any one commodity bundle may be indifferent to another commodity bundle i.e., there is a possibility of indifference or same level of utility between the commodity bundles. None of the commodity bundles are not preferred i.e., consumer can choose any commodity bundle. So choice set of this consumer is specified by the commodity set 'X'.
Relation between nominal interest rate, real interest rate and inflation If we denote the nominal interest rate by R, the real rate by r and the expected inflation by p e then
Q. Describe about Components of GDP? By considering all arrows to and from the goods market we see that Y + I m = C + I + G + X. Left hand side is the value of all finishe
TRADE policy: We are now in a position to sum up our analysis of India's trade policy. First, India's trade policy has always been very intricately related to India's basic de
Q. Consumption function in the IS-LM model? The consumption function will be the same as in cross model, consumption will depend positively on Y. In the classical model, consum
Privatization is the move of ownership from the public sector (government) to the private sector (business).
derive equations for IS,LM and AD curves.
The mundelfleming model takes the world interst rate r* as anexogenous variable.Let,consider what happen when this variable changes.a,what maight cause the world interest rate tori
Assuming an economy with no government and no foreign trade. Measure GDP for the following output scenario: There are three firms: firm A is a minning company, firm B is a stee
Q. Relation between Money - wealth and income? Money isn't the same as wealth. An individual may be very wealthy however have no money (for instance by owning stocks and real e
Equilibrium Income The next step is to use the aggregate demand function, AD, to determine the equilibrium level of income and output. This is done in figure . Recall that the
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd