Define the term Abstractions in economics
Define the term Abstractions in economics?
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Economic principles, theories or models are abstractions, simplifications, which attempt to find the important connections and relationships of economic behavior. These models are useful precisely because they strip away the clutter and complexity of reality.
Briefly describe composite cost of capital? And also describe the procedure to calculate composite cost of capital?
When government intervention is not present, than arbitrage: (w) will reduce price differences when similar good sells at various prices within separate markets. (x) results into economic losses for traders. (y) causes high economic profits for mercha
The market system tends to mainly beneficial allocating resources and distributes goods while: (1) the distributions of wealth and resource ownership are extensively perceived as equitable. (2) markets are extremely competitive. (3) goods are rival an
Distinguish between allocative efficiency and productive efficiency. Give an illustration of achieving productive, but not allocative, efficiency?
Cost of debt= (1-tax rate)* interest rate * (debt ÷capital employed)Cost of equity = risk free rate + market premium (equity shareholders funds÷ capital employed)
By the perspective of nowadays academic standards, Adam Smith must have more evidently acknowledged that several the analyses and insights for that he took credit within his Wealth of Nations had really been gleaned from the writings
Explain: “Affluence tomorrow requires sacrifice today.”
Q X= 600- 6PX + 20I +0.4PY c. Suppose PX increases by 10%, by what percentage would sales decrease? Explain how this price increase affect total revenues from good X.
What do you mean by Supply?
Describe briefly Distinction between the term Component cost and Composite cost?
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