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Before explaining returns to scale it will be instructive to make clear the distinction between change in the scale and changes in factor proportions. The difference between the ch
ELASTICITIES OF SUPPLY AND DEMAND Usually, elasticity is a measure of the sensitivity of one variable to the other. It told us the percentage change in one variable in re
Implementation of economic policy: On the ability of civil servants and Government to learn, Government must possess the following qualities to ensure implementation of econom
The distinction between supply and the quantity supplied is best made by saying that
#queA monopolist has a constant marginal and average cost of $10 and faces a demand curve Of Qd = 1000-10P. Marginal revenue is given by MR= 1000-1/5Q. stion..
What are the costs and difficulties of such an operation? The direct costs are administrative, cooperative and storage costs, whereas the societal costs include misallocation,
The question states that a hotel charges $60 a night for a room per night during off peak. This hotel has a fixed cost of $75 per night and variable costs of $40 per night (only ap
What is optimal choice of consumer according to consumer behavior? Consumer's Optimal Choice: In the fundamental problem of preference maximization, the set of affo
Distinguish among the terms of trade and the balance of trade for a country. Definition of terms of trade a) The amount of a given amount of export goods essential to buy
Disadvantages of State Trading State trading has several disadvantages. (i) State trading is often afflicted by the corruption and inefficiency usually associated with the pu
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