Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter18: The Markets For The Factor Of Production
Section: Chapter Questions
Problem 8PA
Related questions
Question
Explain how
![Mode of submission: Hand-written and mail at doubt.cst@gmail.com
Question. 1
: What is macro economics? Explain how national income is determined in a 3-Sector
Economy?
Question.2
: Show with the help of iso-quants that a firm will be in equilibrium regarding use of a
factor combination when marginal rate of technical substitution between factors is equal to
the ratio of factor prices
Question. 3
: What will the effect on the iso cost line if the wage rate of labour falls keeping rent of
capital unchanged. Also show the shift in iso-cost if the rent of the capital falls keeping wage
rates of labour unchanged.
Question. 4
:"If government levies an additional tax on luxury items, the prices of these items will
increase. However this will cause demand to decrease and as a result the prices will fall back
down, perhaps even to their original levels." Do you agree with the statement. Explain
Question.5
: What do you understand by economic stability ? Illustrate the role of monetary policy
in maintaining economic stability in the country.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb281f5b2-c658-4904-be14-348a8a8d0ed4%2F89da96ea-2fec-4c66-a0f3-651fe00a7a65%2Fct0i09_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Mode of submission: Hand-written and mail at doubt.cst@gmail.com
Question. 1
: What is macro economics? Explain how national income is determined in a 3-Sector
Economy?
Question.2
: Show with the help of iso-quants that a firm will be in equilibrium regarding use of a
factor combination when marginal rate of technical substitution between factors is equal to
the ratio of factor prices
Question. 3
: What will the effect on the iso cost line if the wage rate of labour falls keeping rent of
capital unchanged. Also show the shift in iso-cost if the rent of the capital falls keeping wage
rates of labour unchanged.
Question. 4
:"If government levies an additional tax on luxury items, the prices of these items will
increase. However this will cause demand to decrease and as a result the prices will fall back
down, perhaps even to their original levels." Do you agree with the statement. Explain
Question.5
: What do you understand by economic stability ? Illustrate the role of monetary policy
in maintaining economic stability in the country.
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