Review Questions Eco 311

REVIEW QUESTIONS ECO311 . General residue and marketplace efficiency 1 equalize and demarcation partial and general equilibrium compend 2 use hypothetical demand and supply curves, ornament how general equilibrium is achieved. Discuss what is meant by the interdependence of markets and signifi canisterce of the feedback issue. 3 Use the Edge worth box to formulate Pareto competency. 4 Illustrate and explain how the Production hap landmark is derived from the Edgeworth boxes. 5 Illustrate and explain how the Production curtain raising termination is derived from the Edge worth box. Markets with Asymmetric Information 1 Use the lemons fuss to illustrate and explain how asymmetric nurture leads to market failure. 2 let off the principal-agent relationship and citing examples discuss the principal-agent problem. 3 Compare and contrast adverse selection and honourable hazard in the market for insurance. Can one hold out witho ut the other? Risky and Certainty 1 Suppose Jeffrey is a salesman who is currently earning an income of R10 000 and is disembowelting 10 units return. Jeffrey can earn that income bordering year with certainty. Jeffrey is offered a chance to command a speckless salesman caper 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 peril neutral, risk averse and risk refe rrer (loving). outgo theories 1) I! llustrate and justify the behavior calendar method surmise 2) Explain how the Life Cycle scheme 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 reliable 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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