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user cost of capital economic depreciation interest ratevalue of capital- example an airline buys boeing 737 for 150 million with the expected life
labortotal output 130 250 360 475 580 aif the price of the firms output is 12 per unit and the wage rate is 100
labor productivity - labor productivity and standard of living- consumption can increase if productivity increases- determinants of productivity
assume the price elasticity of cigarettes is 025 by how much would prices have to increase to get a 20 reduction on
there are three firms in an economy a b and c firm a buys 450 worth of goods from firm b and 260 worth of goods from firm c and produces 260 units of
find the annual yearly real and nominal gdp numbers for turkey from tcmb for the recent past use the evds system and tuik data describe the source
the production of 200 units of consumer goods and 300 units of capital goods a indicates full employment b may be a result of unemployment
the technology of production the production process- combining inputs or the factors of production to attain an output categories of inputs
1assume that malaysia can produce cencaluk at 25 bottles per worker and belacan at rm5 per worker assume that indonesia can produce 10 bottles of
the value of title insurance while buying a house a scenario- price of house is 200000- 5 chance that seller does not own house risk neutral
insurance- risk averse are willing to pay to keep away from risk- if cost of insurance equals expected loss risk averse people will buy sufficient
diversification - assume that a firm has a choice of selling air conditioners heaters or both of them- the probability of it being hot or cold is
reducing riskthree methods consumers attempt to reduce the risk are 1 diversification 2 insurance 3 collecting more
business executives and choice of risk example- study of 464 executives found that 20 persons were risk neutral 40 persons were risk takers 20
preferences toward risk choosing among risky alternatives- assume- consumption of a single commodity- the consumer knows all probabilities- payoffs
effects of a real wage existing in the market that is lower than the equillibrium real wage what will eventually happen in this labour market if it
variability- the extent to which the possible outcomes of uncertain event may vary variability a scenario- assume that you are choosing between two
expected value- the weighted average of payoffs or values resulting from all the possible outcomes the probabilities of every outcome are used as
describing risk to measure risk we should know 1 all the outcomes which are possible 2 the probability that each outcome will occur
network externalitiestill this point we have assumed that peoples demands for good are independent of each otheractually a persons demand can be
problems using point elasticity- we may need to compute price elasticity over portion of demand curve instead of at a single point- the price and
substitution effect- the substitution effect is change in an items consumption associated with the change in the price of the item level of
income and substitution effectsa fall in price of a good has the two effects substitution amp income-substitution effectconsumers will tend to buy
individual demandsubstitutes and complements1 the two goods are considered substitutes if an increase decrease in price of one lead to an increase
using the indifference curve approach explain why the demand curve slope downwards from left to right is there any