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mohsinsrk said:HOW COUNTRY WITH FREE FLOATING EXCHANGE RATE COULD IMPROVE ITS BALANCE OF PAYEMENT.
A)DEVALUE ITS CURRENCY
B)INCREASE TAXES
C)REDUCE SUBSIDIES
D)FALL ITS EXPORTS
I AM CONFUSE BETWEEN OPTION A AND B.....IN MARKING SCHEME ANSWER IS B...???
Sijan92 said:11 The output of Firm X depends not only on the quantities of factors of production employed by Firm
X. It also depends directly on the level of output of Firm Y.
What does this illustrate?
A complementary goods
B cross-elasticity of demand
C an externality
D joint production
Can anyone explain why the answer is C with examples??? PLZZZZZ! THIS MCQ IS VERY CONFUSING
YES ANSWER IS B BUT WHYYY?????AS BEEF PRODUCTION HAVE LESS OPPORTUNITY COST AND MORE PROFIT????wwechampion said:Man the first question really is confusing!!!
I would've done A for sure but then the answer is B...I don't get it...
For the second question, i think the answer is B.
mohsinsrk said:HOW COUNTRY WITH FREE FLOATING EXCHANGE RATE COULD IMPROVE ITS BALANCE OF PAYEMENT.
A)DEVALUE ITS CURRENCY
B)INCREASE TAXES
C)REDUCE SUBSIDIES
D)FALL ITS EXPORTS
I AM CONFUSE BETWEEN OPTION A AND B.....IN MARKING SCHEME ANSWER IS B...???
@sijan after discussing the problem with my seniors and teachers i came on conclusion that....externality is basically effect to third party or effect borne to those indirectly involve in production or consumption of a particular product...where as jointly produce goods are jointly supplied....situation is that firm y is affecting output of firm x..which is according to the difination of externalities...however i am still confuse between c and d.......required an expert opnion here......Sijan92 said:Its 02 May paper1 Q11
mohsinsrk said:A farmer can produce both beef and lamb. The opportunity cost of a kilo of beef is three kilos of
lamb. The price of a kilo of beef is twice that of lamb.
What should he do if his aim is to maximise his revenue?
A concentrate on beef production
B concentrate on lamb production
C produce beef and lamb in the ratio 3:2
D produce twice as much beef as lamb
mohsinsrk said:@sijan after discussing the problem with my seniors and teachers i came on conclusion that....externality is basically effect to third party or effect borne to those indirectly involve in production or consumption of a particular product...where as jointly produce goods are jointly supplied....situation is that firm y is affecting output of firm x..which is according to the difination of externalities...however i am still confuse between c and d.......required an expert opnion here......Sijan92 said:Its 02 May paper1 Q11
Sijan92 said:@akbar. I think B is the answer. What is given in the mark scheme?
Sijan92 said:@sameer: Nice explanation man! But could you please specifically point out with an example as to how externality affect the production of another firm?
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