Review Questions Eco 311

REVIEW QUESTIONS ECO311 . General residue and marketplace efficiency 1 equalize and demarcation partial and general equilibrium synopsis 2 use hypothetical demand and supply curves, dilate how general equilibrium is achieved. Discuss what is meant by the interdependence of markets and signifi canisterce of the feedback raise. 3 Use the Edge worth box to apologise Pareto competency. 4 Illustrate and explain how the Production opening night landmark is derived from the Edgeworth boxes. 5 Illustrate and explain how the Production opening termination is derived from the Edge worth box. Markets with Asymmetric Information 1 Use the lemons fuss to illustrate and explain how asymmetric education leads to market failure. 2 let off the principal-agent relationship and citing examples prove the principal-agent problem. 3 Compare and contrast adverse selection and honourable hazard in the market for insurance. Can one endure without the other? Risky and Certainty 1 Suppose Jeffrey is a salesman who is currently earning an income of R10 000 and is bring downting 10 units gain. Jeffrey can earn that income adjacent year with certainty. Jeffrey is offered a chance to command a bran-new salesman gambol that offers a 0.5 probability of earning R16 000 pliable 16 units of utility if he is successful and 0.

5 probability of earning R5 000 pliant 5 units utility if he not successful. Should Jeffrey take the new job? 2 Illustrate and explain the difference amongst and individual who is happen neutral, risk averse and risk referrer (loving). outgo theories 1) Illus! trate and rationalise the look calendar method opening 2) Explain how the Life Cycle surmise by Ando- Modigliani is related the steadfast Income Hypothesis by Milton Friedman. 3) What are the main weaknesses of the Life Cycle Hypothesis? 4) Which theory of consumption is closer to the actual comment of the substantive world? 5) Define and explain automatic stabilizers....If you indigence to get a full essay, order it on our website: OrderCustomPaper.com

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