1. Explain how the concepts of the income effect and the substitution effect relate to the phenomenon the backward-bending labor supply curve. 2. Use and indifference-curve diagram to illustrate the i How does a consumer achieve equilibrium, using an indifference curve approach? What...
Explain the concept of market equilibrium and efficiency. Explain the concept of isoquant and work on its function. Assume that the Phillips curve for a given economy is given by: \pi_t= \pi_{t-1}-0.5(u_t-0.06). a) Explain the concept of the natural level of unemployment using ...