Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (6th Edition)
Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (6th Edition)
6th Edition
ISBN: 9780134304755
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 1, Problem 1.3.5PA
To determine

Testing the hypothesis.

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Fisher claims that the counterparts of particle and energy in mechanics are individual and utility in economics. The 2nd law of thermodynamics, on the other hand, asserts that free energy is irreversibly converted to bound energy as entropy continuously increases in the universe. Discuss whether the mainstream economics is compatible with the universe described by thermodynamics.
Why general equilibrium is not viable for Alfred Marshal’s theory of value?
Scarcity and choice are important in economics because there would be no economy if there was no scarcity (limitation in resources) and no choice as to how these resources would be used. Scarcity and choice are the founding blocks of the story of economics. Scarcity in economics refers to limited resources against unlimited wants. Choice is the alternative between them. Economics deals with the study of human behavior and how humans allocate their limited resources (scarcity) with their unlimited wants. Since we have limited resources, we usually have to choose one option (choice) and forgo the other. This phenomenon is called "opportunity cost" . Our wants change when we consume more of one particular option, Its value diminishes and we start preferring some other option. This is called 'utility' or 'diminishing utility' as a progressive term. Example: If you are in school and you only have $10 for lunch money (scarcity), you can either buy a…
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