Because it's More than a Subject
The pure public good has been the subject of most economic analysis of public goods. In many ways the pure public good is an abstraction that is adopted to provide a benchmark case against which other, more realistic, cases can be assessed. A pure public good has the following two … read more
The law of variable proportion occupies an important place in economic theory. This law examines the production function with one factor variable, keeping the quantities of other factors fixed. In other words, it refers to the input-output relation when output is increased by varying the quantity of one input. When … read more
In the cardinal utility approach, the utility function was direct in the sense that the total utility was related to the quantities of different commodities and services consumed by a consumer at a given time. The direct utility function can be expressed as: The ordinary demand equations for the goods … read more
The consumer is assumed to be rational. Given his income and the market prices of the various commodities, he plans the spending of his income so as to attain the highest possible satisfaction or utility. This is the axiom of utility maximisation. In the traditional theory it is assumed that … read more
Basic competitive models gives an answer of the control problems of an economy i.e., who makes the decision of what to produce, how to produce and for whom to produce. We know that, economics has been evolved and developed in the framework of a free market economy in which the … read more
A change in the price and income alters the consumer’s expenditure pattern. So to know the consumer’s expenditure pattern due to changes in price and income, all the variables should be varied simultaneously. Let, Utility function be Subject to Or Here we can form a new function with the help … read more
This Cobb-Douglas production function is based on the empirical study of the American manufacturing industry made by Paul H. Douglas and C.W. Cobb. It is a linear homogeneous production function that considers only two inputs, labor and capital, for the total output of the manufacturing industry. The Cobb-Douglas production function … read more
Find all the Six Partial Derivatives of the following and verify that
Question 1: Maximize Subject to, Ans: (60,20) and 1100 Question 2: Maximize Subject to, Ans: (4,2) and 10 Question 3: Minimize Subject to, Ans: (1,5) and 13 Question 4: Minimize Subject to, Ans: (6,12) and 240 Question 5: Minimize Subject to, Ans: (4,0) and (3,0.25) and 24 Question 6: Maximize … read more
The innovation theory of trade cycles is associated with the name of Joseph Schumpeter. Schumpeter accepts Juglar’s statement that “the cause of depression is prosperity,” and gives his own view about the originating cause of the cycle. “Innovations in the industrial and commercial organization are virtually mainly the outcome of … read more