You are welcome to ask any questions on Economics. Though you might also like to try google custom search (top right) to see if the topic has been covered before.
I am looking to explain economic principles / ideas/ recent developments in economics. I can’t promise to answer, but will try if it meets the criteria below.
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- I aim to try and simplify economics; as a rough guide I would aim at an understanding similar to a good British A Level student.
- I am looking to explain economic principles / ideas/ recent developments in economics.
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A firm with the production function ?(?, ?) = 2√?? is currently utilizing 8 units of labour and 2 units of capital. If this is the optimal input mix, and if total costs are equal to 16, what are the prices of capital and
labour?
There are 20 food outlets in the city competing to meet lunchtime demand for sandwiches. What will happen to the average revenue (AR) and marginal revenue (MR) of each outlet when a national sandwich company opens the twenty-first outlet in the city?
Hi,
I basically know the difference between nationalised and public sector banks. But I read recently in a book stating that the equity stakes of RBI in SBI s taken over by government of India by 2007. I want to know the difference between holding of stakes by RBI and government of India and the history behind it.
what exactly is shadow price & how it is calculated?
i mean if suppose the price of construction of a bridge is $10, how shadow price of it will be calculated?
Q#2 You have just taken a job that requires you to move to a new city. In relocating, you face the decision of whether to buy or rent a house. A suitable house costs $300,000 and you have saved enough for the down payment. The (nominal) mortgage interest rate is 10°/o per year, and you can also earn 10°/o per year on savings.
Mortgage interest payments are tax deductible, interest earnings on savings are taxable, and you are in a 30°/o tax bracket. Interest is paid or received, and
taxes are paid, on the last day of the year. The expected inflation rate is 5°/o per year.
The cost of maintaining the house (replacing worn out roofing, painting, and so on) is 6°/o of the value of the house. Assume that these expenses also are paid entirely
on the last day of the year. If the maintenance is done, the house retains its full real value. There are no other relevant costs or expenses.
a. What is the expected after-tax real interest rate on the home mortgage?
b. What is the user cost of the house?
c. If all you care about is minimizing your living expenses, at what (annual) rent level would you be just indifferent between buying a house and renting a house of comparable quality? Rent is also paid on the last day of the year.
Can someone please explain the following paragraph? ‘Whatever the philosophical or methodological approach economists have taken to their discipline, whatever view they have taken of its scope, objectives and analytical techniques, the theory of value – with its associated theory of distribution – has been a key feature of the disciplinary matrix or paradigm to which they have chosen to conform’ (The evolution of economic ideas, Phyllis Deane, pg 19).