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Discuss the fundamental nature of Management Economies with respect to the three choice problems of the economy. b)

19 / 01 / 2019 Economics

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Discuss the fundamental nature of Management Economies with respect to the three choice problems of the economy. b) Inflation is a global Phenomenon which is associated with high price causes decline in the value for money. It exists when the amount of money in the country is in excess of the physical volume of goods and services. Explain the reasons for this monetary phenomenon. c.c) The figure below shows a portion of a consumer’s indifference map. Both PY and PX are $2 and consumer income is $24. Graph i) Draw the budget constraint facing this consumer (bundle!“F”) ii) Which is the highest indifference curve the consumer can reach? iii) For this budget constraint, how many units of Y will the consumer purchase? iv)How many units of X? Now let X rises to $6 while PY remains $2. v) Draw the new budget constraint (bundle “E”) vi) On this new budget constraint, how many units of Y will the consumer purchase? vii) How many units of X? viii) Calculate point E. d) The short run cost curve is U shaped and just also like the long run cost curve. Why these curves are similarities? Discuss.



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