What is meant by comparative statics? Explain with an example
What will be an ideal response?
Comparative statics is the comparison of economic outcomes before and after some economic variable has changed. For example, a consumer might decide to buy more ice cream in hot weather. In this example, the increase in the consumption of ice cream is the economic outcome that changes in response to a change in a second variable, the weather.
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West Coast Gas, Inc, is a natural gas supplier. The firm faces the demand schedule shown in the table above and cannot price discriminate
The company's fixed cost is $1,000 per month and its marginal cost is constant at $10 per thousand of cubic feet. The government imposes a marginal cost pricing rule on the company. a) What is the price of natural gas supplied by West Coast Gas? How many cubic feet does the company sell? What is the firm's economic profit per month? b) How does the regulation affect total surplus? c) Is the regulation in the social interest? Explain.
Inventories refer to
A) goods that have been planned but not yet produced. B) goods that have been produced and sold in the same year. C) goods which have been presold before they are produced. D) goods that have been produced but not yet sold.