Illustrate the changes in Demand, Supply and Equilibrium
Illustrate the changes in Demand, Supply and Equilibrium?
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Changing demand by way of supply held constant:
1. Increase in demand will have effect of increasing equilibrium price and quantity.
2. Decrease in demand will have effect of decreasing equilibrium price and quantity
Changing supply by way of demand held constant:
1. Increase in supply will have effect of decreasing equilibrium price and increasing quantity.
2. Decrease in supply will have effect of increasing equilibrium price and decreasing quantity.
Illustrate the Optimal or best product-mix and also Law of increasing opportunity costs?
Question Can you describe what the production function for the game looks like? (How are labour, capital and resources combined? Are there constant, increasing or decreasing returns to scale?) Answer Q : Describe double coincidence of wants Double coincidence of wants: This means that one person's wishing to buy and sell should coincide with another person’s wish to buy and sell.
Double coincidence of wants: This means that one person's wishing to buy and sell should coincide with another person’s wish to buy and sell.
What was rightward shift of PPC point out? Answer: It points out growth of the resources.
What persuades new firms to enter in an industry? Answer: Abnormal profit encourages new firms to enter an industry.
Illustrate and clarify the economizing problem?
Describe redistributive effects of inflation?
Explain: “Affluence tomorrow requires sacrifice today.”
What happens in the resource markets?
Adam Smith and most of the typical economists who followed instantly in his footsteps: (i) viewed monopoly as no big problem. (ii) encouraged monopolies due to their research and development abilities. (iii) thought monopoly power was a communist plot
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