Choose 3 Micro concepts that are important or interesting, describe them briefly, explain how all three are inter-related, and what relevance they would have to one's life.

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Microeconomics is the study of the economic behaviour of individual consumers, firms, and industries and the distribution of production and income among them. It considers individuals both as suppliers of labor and capital and as the ultimate consumers of the final product. It analyzes firms both as suppliers of products and as consumers of labor and capital.

3 Micro Concepts

Demand

A consumer's desire and willingness to pay for a good or service. For example, a consumer may be willing to purchase 2 lbs of potatoes if the price is $0.75 per lb. However, the same consumer may be willing to purchase only 1 lb. if the price is $1.00 per lb. The main determinants of the quantity one is willing to purchase will typically be the price of the good, one's level of income, personal tastes, the price of substitute goods, and the price of complementary goods. The quantity demanded is the amount of a certain product people are willing to buy at a certain price, and the relationship between price and quantity demanded is known as the demand relationship.

Supply

Supply ...

Solution Summary

This explains the important concepts of microeconomics and their utility. The concepts discussed are demand, supply and elasticity. References are included.

With respect to the price elasticity of demand, construct a graph using the data in figure 1. Illustrate the ranges on the demand curve that indicate elastic, inelastic, and unitary elasticity. Explain your answers. Enter non-numerical responses in the same worksheet using tax boxes.
Quantity total

Explain the following
Law of demandand law of supply
Factors affecting demandandsupply
Price elasticity of demand
Factors affecting price elasticity of demand

Given the same price elasticity of supply, sellers would be able to pass along the smalles portion of a 10%tax on which item?
Beef with a price elasticity of demand of .62
Pork with a price elasticity of demand of .73
Chicken with a price elasticity of demand of .32
Fish with a price elasticity of demand of .12

1. Determine the price elasticity of demand at each quantity demanded using the formula: Percentage change in quantity demanded = (Q2-Q1)/Q1 divided by percentage change in price = (P2-P1)/P1
b. Redo exercise 1a using price changes of $10 rather than $5
c. Plot the price and quantity date given in the demand schedule. Indi

Suppose the price of apples rises from $3.50 a pound to $4.00 and your consumption of apples drops from 30 pounds of apples a month to 20 pounds of apples. Calculate your price elasticity of demand of apples. What can you say about your price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary Elastic? Be sure t

The demand for company X product is given by Q(x) = 12 - 3P(x)+ 4P (y)
Suppose good X sells for $3.00 per unit and good Y sells for $1.50 per unit.
a. Calculate the cross-price elasticity of demand between goods X and Y at the given prices.
b. Are goods X and Y substitutes or complements?
c. What is the own price elastici

Consider a service that you buy frequently. (Can use pedicure 2 times per month at $50 for graph and calculation)
a. Suppose that the price was 5% lower and all other factors do not change. How much more would you buy each year?
b. Using this information, calculate the own-price elasticity of your demand.

Suppose the price of apples rises from $3.50 a pound to $4.00 and your consumption of apples drops from 30 pounds of apples a month to 20 pounds of apples. Calculate your price elasticity of demand of apples. What is the price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary Elastic?

1. You read in the paper a story about grapefruit markets. The story contains the following information:
A. There has been a frost in the "Grapefruit belt" and a lot of lost plants.
B. There is a new kind of fertilizer that can increase yields by 20%
C. The International Union of Grapefruit Pickers and Packers has just neg

If the market demand curve is Q=100-p. What is the market price elasticity of demand? If the supply curve of individual firms is q=p and there are 50 identical firms in the market, draw the residual demand facing any one firm. What is the residual demandelasticity facing one firm at the competitive equilibrium?