Answer to Question #154733 in Microeconomics for joy

Question

1. Clarify the relationship between "production and cost", based on your knowledge.

2. Explain all these, write only what you understand:

a) Importance of Distribution,

b) Concept of national income,

c) Theory of employment or

d) Concepts of supply and demand.

3. What do you understand about national income?

4.How would you like to summarize about approaches for the monetary analysis?

Answer 1

1. As production increases, we add variable costs to fixed costs, and the total cost is the sum of the two. So, there is direct relationship between production and cost.

2.

a) Distribution mix plays an important role to increase the value of the products through delivery of goods in right quantity, at right place and right time. Distribution serves as link between producers and consumers.

b) National income is the total value a country's final output of all new goods and services produced in one year.

c) The classical theory assumes over the long period the existence of full employment without inflation

d) There is a relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy.

3. National income means the value of goods and services produced by a country during a financial year. Thus, it is the net result of all economic activities of any country during a period of one year and is valued in terms of money.

4. Monetary analysis consists of a detailed analysis of monetary and credit developments with a view to assessing their implications for future inflation and economic growth.