Explanation

• Inferior goods are the goods which have negative income elasticity.
• This means that as income increases, the quantity demanded for inferior goods decreases.

Explanation

• The term "crowding out" refers to the decrease in private investment that occurs when government borrowing increases.
• When the government borrows more money from the financial markets to finance its spending, it increases the demand for loanable funds, leading to higher interest rates.
• Higher interest rates make borrowing more expensive for businesses and individuals, reducing their willingness to invest and borrow for private investment projects.
• This phenomenon is known as "crowding out" because government borrowing "crowds out" private investment by competing for available funds in the financial markets.
  

Explanation

• Tariff refers to a tax or duty imposed by a government on imported goods or services.
• It is a common instrument of trade policy used to protect domestic industries and generate revenue.

Explanation

At any level of output where the short-run average cost curve is tangent to the long-run average cost curve, the long-run marginal cost (LMC) is equal to the short-run marginal cost (SMC).

Explanation

Explanation

• A profit-maximizing firm will hire more labor up to the point where the marginal revenue product (MRP) of labor equals the marginal factor cost (MFC) of labor, which is the wage rate. This is known as the point of equilibrium in the labor market.
• The MRP of labor is the additional revenue generated by the last unit of labor hired, and the MFC is the additional cost of hiring that unit of labor. When MRP = MFC, the firm has maximized its profits.

Explanation

Given own price elasticity equal to -2.5 implies that if the price of the good increases by Rs. 10, then the quantity demanded of the good Will decrease by 25% of initial quantity.

Explanation

Mono cropping refers to the practice of growing the same crop on the same land year after year.

This can lead to soil depletion, reduced fertility, and increased pest and disease pressure, making it a less sustainable farming practice.

Explanation

• In monopolistic competition, long-run equilibrium involves zero economic profit.
• Firms in monopolistic competition have some degree of market power, allowing them to differentiate their products.

Explanation

The total output produced in a country, including that from both domestic and foreign resources, is called Gross Domestic Product (GDP).

GDP represents the total market value of all final goods and services produced within a country's borders in a specific time period.