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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
THEORY OF REVEALED PREFERENCE: If consumer's taste and preferences do not change, then observation of her market behaviour or, actual act of choice between the commodity sets
Causes of inflation: Excessive growth in wages relative to productivity can cause inflationary pressures. This causes aggregate demand to increase relative to aggregate supp
Consider 2 firms i=1,2 producing quantities q1 and q2 respectively. Let the market price be given by P=a-b(q1+q2). Firm 1''s Marginal cost c is common knowledge but 2''s cost is no
The price elasticity ( ε ) of demand for Q has been estimated at -0.5. Current consumption Q* is 70 units and market price (P*) is 0.70. a. Fit a linear demand curve to the obs
What is the difference between 'concept' and 'assumption'? These two terms are very dissimilar. The term 'concept' refers to an idea or abstract principle. For instances, forc
explain optimal use of variable input?
the prevalence of excess capacity is the direct consequence of the existence of monopolistic competition
What are the possible advantages of free trade? Firms a) Specialisation and enhanced use of comparative advantage b) Possibility of advantages of scale c) Spread
different types of production funtion and curve given by different economist
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