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QUESTION a) Differentiate between returns to factor and returns to scale. b) In the long-run the Average Cost Curve is u-shaped. Discuss c) Whenever a firm is making loss
Problem 1: (a) The Mauritian government is now increasingly involving the private sector in the development of the economy. How can government support effective private sector
Question 1 Explain the law of diminishing returns. What are its causes and effects? Question 2 Compare perfect and imperfect markets Question 3 A monopolist with a linea
If an economy is experiencing reduction, will the nominal interest rate be higher or lower than the real interest rate? What is the equation that relates nominal rates, inflation a
The end of fixed exchange rates
There are many benefits to a free market economy. They range from the moral issues to the practical issues. We will deal mainly with the practical ones. Unprecedented innovati
Is foreign debt a problem? Foreign debt is the whole amount owed overseas through a country at an exact moment in time. Debt is a problem since • High debt imply high inter
What do you believe are the consequences of a rating downgrade?
An agent has a utility function over goods 1 and 2 of the form U = x c 1 x d 2 where c is your 1- digit number and d is your minimum number. The agent's income is equal to you
Explain the implications international capital flows problem. Implications: • FDI can assist physical capital accumulation and result within growth - usually beneficial b
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