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Economies of Scale
How we constract the cost structure of firms
suppose the production function is given as:X=b0Lb1Kb2,where b0=level of technology find marginal product of factors(MPL0and MPK) find factor intensity
Example: The Value of Clean Air Air is free in sense that we do not pay to breathe it. Question: Are benefits of cleaning up air worth the costs? People pay extra to buy
Time is a significant determinant of price elasticity. If a price changes, it might take consumers a certain amount of time to discover alternative lifestyles or commodities to ac
explain economic growth
You are the CFO for Carnival Corportaion and your boss, the CEO informs you that he wants to add three new cruise ships to the company''s inventory. Each ship will cost $500 millio
Gasoline Rationing - In the year 1974 and again in the year 1979, the government imposed price controls on gasoline. - This resulted in scarcity and gasoline was rationed.
williamson''s model of managirial discretion
The economy, however, is facing inflationary pressures. To deal with the macroeconomic problem, the government uses expansionary fiscal policy to decrease taxes and, as an indirect
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