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Profit: This is surplus left over after a company sells its output and pays off cost of production (which includes raw materials, labour costs and a proportional share of its capit
Why is investment so important in an economy? Define investment as an enhance in capital stock and link this to broad macro issues; future output, enhance in living standards, ta
Current Account: The Current Account can be broken down into two parts, viz., one, balance of trade, and, two, balance on invisibles. The Balance of Trade (BOT) deals only wit
Relatiön between TC ,TFC and TVC
a. Suppose the demand for saline solution is perfectly inelastic for contact lens wearers. If the government imposes a tax on saline solution, what occurs? Be sure to tell what hap
Economies of Scale The reduction in the cost of each additional unit produced as all factors of production increase. Factors contributing to economies of scale include discoun
First Degree Price Discrimination - The monopolist sells different units of the commodity at different prices which differ from person to person. Second Degree Price Discriminat
The Snob Effect - If network is negative externality, a snob effect exists. * The snob effect refers to desire to own unique or exclusive goods. * The quantity demanded o
Which firm has the greatest minimum efficient scale?
Consider the following insurance market. There are two states of the world, B and G, and two types of consumers, H and L, who have probabilities pH =0.5 and pL =0.25 (high and low
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