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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
1. Explain what are price ceilings and price floors and how they effect the market for a good or service. Also show through graphs, if they cause any inefficiencies in a perfectly
In 1939 the U.S. economy was operating where in the production possibility curve?
GDP Price Level At the equilibrium level of income aggregate spending in the economy equals aggregate output. All along, we have assumed that the general price level remains un
argument against in favour of traditonel theory profit maximisation
An individual derives utility from consuming goods X and Y according to the following estimated utility function U = 12X 2/3 Y ¼ X and Y are quantities (units) of
the basic circular flow model suggests that...
Suppose you are a regulator in charge of allocating water between residential and agricultural users (farmers) in Southern California. You conduct a survey that finds that under th
Question: (a) Using an example, differentiate between private, social and external costs and benefits. (b) With the use of a diagram, describe the difference between profi
if a commodity has limited demand , should economist say that we still have a scarcity ?
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