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COST-OF-LIVING INDEXES * The CPI is computed each year as the ratio of cost of a typical group of consumer goods and services today in comparison to the cost during a base per
What actions could a government take in order to keep the price above market equilibrium? There are four basic possibilities here; 1) Minimum price; 2) A tax on the good
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
Yao''s weekly demand for basketballs is given by Qd = 3-P^2 where P is the price of basketballs. At the current price, Yao''s demand for basketballs is unit elastic. What is the cu
Define the returns to scale in production technology. Returns to scale in production technology: Assume that we are using some vector of inputs x to generate some output y a
Isoquants * Assumptions - Food producer has 2 inputs Labor (L) & Capital (K) * Observations: 1) For any level of K, output increases with L. 2) For any
what is market economy and how it solve the central problem
Discrimination: As a result of sexist and racist attitudes and deliberate efforts of employers to oppose groups of workers against each other, different groups of people (divided a
NETWORK EXTERNALITIES Till this point we have assumed that people's demands for good are independent of each other. Actually, a person's demand can be affected by the number
Imagine a country where plane and train services between two main cities are both provided by private companies, and, from a consumer perspective these services are viewed as subst
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