basic economics

2512 WordsNov 26, 201311 Pages
ASSIGNMENT 1 DIPECO03 Basic Economics Question 1 Flow of Goods and Services Flow of Cash EXAMPLES OF TRANSACTIONS ON MARKET FOR GOODS AND SERVICES Question 1(a) and 1(c) EXAMPLES OF TRANSACTIONS ON MARKET FOR FACTOR OF PRODUCTION Question 1(b) and 1(d) Question 2 Consider the market for minivans. For each of the events listed here, identify which of the determinants of demand or supply are affected. Also indicate whether demand or supply increases or decreases. Then draw a diagram to show the effect on the price and quantity of minivans. An example of a supply & demand graph (a)People decide to have…show more content…
How does it influence the shapes of cost of production curves? Costs of production are divided into two types of costs: 1) Fixed cost - Costs that do not vary with the quantity of product produced. 2) Variable cost – Costs that vary with the quantity of product produced. The Law of Diminishing Return is an economic law stating that if one input of the production is increased while all other inputs remained constant, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output. If the
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