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Opportunity Cost This is the amount that is sacrificed when choosing one activity over the next-best alternative. In organization, an example of opportunity cost is seen in th
Income Elasticity The functional relationship among the changes in the quantity demanded for a good or service and the change in income of those persons demanding the good or s
Problem: (a) (i) Assuming that a household uses a subjective discount rate of 10%, calculate the amount that she must spend on consumption per annum during her years of existe
How does economic theory contribute to managerial decisions?
McDonalds has been operating in many Asian countries such as China, Singapore and Japan. However, McDonalds has yet to open its ?rst restaurant in Vietnam, a country with over 80 m
Total Cost (TC) This is the sum of fixed costs and variable costs i.e. TC = FC + VC.
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
DIRECT TAXES A direct tax is one where the impact and incidence of the Tax is on the same person e.g. Income Tax, death or estate duty, corporation taxes and capital gains
Real and nominal wages Wages are wanted only for what they will buy, real wages being wages in terms of the goods and services that can be bought with them. Nominal wages
Problem 1: All economies of the world can be said to be ‘mixed', to a greater or lesser degree, in that there is no economy where there is no state activity and no economy wher
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