Readers Question: What is economic analysis? Can you give some examples? Kindly refer me to an easy to read book on economic analysis. Economic analysis involves examining issues and problems from the perspective of an economist. Economic analysis would involve some or all of the following: Examining the opportunity cost of a decision. (e.g. if the …
Readers Comment: I believe if you want to solve the recession then look at footballers. they earn millions and for what/kicking a ball around!! I think their wages should be cut down to say 75k a year and the remaining money should be used wisely. This recession illustrates that economic policy often involves making decisions …
The Neo-Classical Theory of Firms makes the following assumptions Firms are profit maximisers. Firms will maximise profits where MR=MC In the short run, firms are subject to diminishing returns. In the short run, capital is fixed, therefore MC is upwardly sloping after diminishing returns sets in. Prices are flexible. If there is a shortage of …