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# General Equilibrium

### For the last 70 years the U.S. government has used price supports to provide income assistance to American farmers.

For the last 70 years the U.S. government has used price supports to provide income assistance to American farmers. At times the government has used price floors, which it maintains by buying up the surplus farm products. At other times, it has used target prices, a policy by which the government gives the farmer an amount equal

### Equilibrium Price and Quantity: Supply and Demand

For the following sets of supply and demand curves, calculate equilibrium price and quantity. QD = 500 - P QS = 50 + P *Price = 225 *Quantity = 275 *Price = 220 *Quantity = 500 *Price = 20 *Quantity = 1000 *Price = 275 *Quantity = 225

### Auto sales data show that as the price of gasoline increased significantly recently, fewer people bought SUVs.

Please provide explanations and show work. Market Equilibrium Analysis Question 1: Auto sales data show that as the price of gasoline increased significantly recently, fewer people bought SUVs. Based on this economic fact, please address the following questions: a. Determine the market in question (i.e., which ma

### Labor/ Wage Equilibrium

Acme is the sole supplier of security systems in the product market and sole employer of locksmiths in the labor market. The demand curve for security systems is given by P = 100 - Q. The short run production function is given by Q = 4L and the supply curve for locksmiths is given by W = 40 + 2L. I am having trouble finding how

### Change in the Equilibrium Price

In the short run, a change in the equilibrium price will always lead to inflation cause a shift in the demand curve cause a shift in the supply curve cause a change in the quantity demanded or supplied.

### If the price of good x falls, explain how the consumers relative consumption of the two goods change.

Suppose that, from an initial consumer equilibrium position, the price of good X falls while the price of good Y remains the same. Using indifference curve analysis, explain how and why the consumer's relative consumption of the two goods will change.

### Commodity Subsidy effect on Consumer/Producer Surplus

The inverse market demand curve is P=140-Q, and the inverse supply curve is P=20+Q. Now suppose a commodity subsidy of \$20 is given for each unit of production. In this new distorted market equilibrium, compute the following: 1. equilibrium demand price 2. equilibrium supply price 3. equilibrium quantity 4. the additional

### Consumer Surplus vs Producer Surplus

The inverse market demand curve is P=140-Q, and the inverse supply curve is P=20+Q. Assuming the market is competitive, compute the following: 1. Equilibrium price 2. Equilibrium quantity 3. Economic value of the equilibrium consumption 4. Resource cost (the same thing as production cost, or economic cost) of the equilibr

### Consider the city of Silver Spring, where zoning laws limit the number of video arcades to one.

1) Consider the city of Silver Spring, where zoning laws limit the number of video arcades to one. The city's only video arcade has a price of \$0.50 per game with an average cost of \$0.34 per game. Suppose that the city eliminates its restrictions on video arcades, allowing additional firms to enter the market, "Each additional

### Term Equilibrium Output Level

All firms in a competitive industry have long-run total cost curves given by LTC = Q^3 - 10Q^2 + 36q, and LTC = q^2 + 4q where Q is the firm's level of output. I am having trouble finding the industry's long term equilibrium price as well as the long term equilibrium output level for each LTC.

### Compute new equilibrium and explain results ISLM

Y = 1550 - 2400i = 600 + 3000i 950 = 5400i i = 0.176 substitute into IS: Y= 1550 - 2400*0.176 = 1127 Then substitute Y and i into C and I: C= 300+.3(Y-T) = 300 + 0.3 * (1127 - 250) = 563.1 I= 250+.2Y-1200i = 250 + 0.2* 1127 - 1200 * 0.176 = 264.2 3. Then assume M/P rises to 1890 and solve for the new Y and i. h

### Equilibrium real output

C= 300+.3Yd I= 250+.2Y-1200i G=300 T=250 (M/P)=3Y-9000i;M/P=1800 Using the above derive the IS and LM relations and solve for the equilibrium real output. Solve for the equilibrium interest rate and the equilibrium values of C and I. Then assume M/P rises to 1890 and solve for the new Y and i.

### Multiple Choice - If a perfectly competitive firm finds that the price exceeds its ATC

1) a perfectly competitive firm a) sells a product that has perfect substitutes b) has a perfect inelastic demand c) has a perfectly elastic supply d) all of the above 2) In the short run, a perfectly competitive firm____ earn an economic profit and ____ incur an economic loss a) migh

### Profit - Equilibrium in Monopoly

In monopoly with Marginal Cost of \$8 per unit, zero fixed cost, inverse demand function of P=38-Q what would be the profits in equilibrium: \$345, \$225, or \$120. Please show how this was solved.

### The solution to equilibrium price and quantity

19. For each of the following sets of supply and demand curves, calculate equilibrium price and quantity. a. QD = 2000 - 2P QS = 2P b. QD = 500 - P QS = 50 + P c. QD = 5000 - 10P QS = -1000 + 5P

### Manegerial Economics

9 The profits of Du Pont de Nemours and Company in 1997 were about \$2.4 billion. Does this mean that Du Pont's economic profit equaled \$2.4 billion? Why or why not? 18 If the demand curve for wheat in the United States is P = 12.4 - 4QD where P is the farm price of wheat (in dollars per bushel) and QD is the quantity of whe

### Marginal Willingness to Pay/Government Fixing Quantity

Please help with this problem. I'm not looking for a final answer, but I am definitely looking for the mathematical approach used. Thank you! MB1=150-Q1 is the marginal willingness to pay, or marginal benefit, function for Consumer 1 who consumes Q1 of the commodity Q per month. For example, when Q1=1, MB=149, meaning that th

### Equilibrium Point in Demand Curve

Problem: Two Identical Firms (Cournot Duopoly thus q1=q2) with demand of P=100-2Q and cost function of C(Q)=4Q. What is the equilibrium deadweight loss? Show the steps. Could be: \$128 \$256 \$384 \$512

### Equilibium Output in a Cournot Duopoly

2 identical firms (Cournot Duoploy) with a demand of P=100-2Q and a cost function of C(Q)=4Q. What is the equilibrium output of each firm? Please show the work.

### price and the quantity of equilibrium sales

Please give your answers in writing and with use of relevant diagrams and indicate what will happen to the price and the quantity of equilibrium sales under each circumstance. Demand for refrigerators is often described as cyclical and very sensitive to refrigerator prices and interest rates. Given these characteristics, des

### Compare the economic incidence of tax with its legal incidence

Suppose that demand for oranges is given by the following equations: Q= -400 P+2,000 With quanity (Q) measured in oranges per day and price (P) measured in dollars per Orange. The supply curve is given by: Q = 1200 P A. Compute and present graphically the equilibrium price and quantity of oranges. B.

### Gas Pipeline

Consider the following event: Due to severe damage, a gas pipeline supplying gas to Arizona was shut down for a few weeks in the summer of 2003. Gas became scarce in Arizona, and prices rose, causing consumers to panic. Predict how the following event affected the market equilibrium.

### Market Structure Concepts. Indicate whether each statement is true or false and explain why

A. Equilibrium in monopolistically competitive markets requires that firms be operating at the minimum point on the long-run average cost curve. B. A high ratio of distribution cost to total cost tends to increase competition by widening the geographic area over which any individual producer can compete. C. The price elasti

Over the last century, the Boeing Co. has grown from building planes in an old, red boathouse to become the largest aerospace company in the world. Boeing's principal global competitors is Airbus, a French company jointly owned by Eads (80 percent) and BAE systems (20percent). Airbus was established in 1970 as a European conso

### Economics Questions

Assume that initially G is \$100 and equilibrium real GDP demanded is \$1,000. If the multiplier is 4 and G increases to \$200, real GDP demanded will increase a. by \$100 b. by \$2,000 c. by \$1,000 d. to \$1,400 e. to \$2,000 If autonomous net taxes decline by \$40 billion and the MPC = 0.75, then equilibrium real GDP demanded

### Stable Competitive Equilibrium

Bada Bing,Ltd. supplies standard 256 MB RAM chips to the US computer and electronics industry. Like the output of its competitors, Bada Bings Chips must meet strict size,shape,and speed, specifications. As a result the chip supply industry can be regarded as perfectly competitive. The total cost and marginal cost functions fo

### Product Demand Curve: Equilibrium Values of P and Q

A product's Demand Curve is: Qd=25-P and its Supply Curve is: Qs =10 + 2P a. When P = \$20 WHAT is the difference, if any between Qd and Qs b. When P= 43, what is the difference if any between Qd and Qs c. What are the equilibrium values of P and Q.

### Econometrics Multiple Choice

1. A study has estimated the effect of changes in interest rates and consumer confidence on the demand for money to be: log M = 14.666 + .021 log C - .036 log r, where M denotes real money balance. C is an index of consumer confidence, and r is the interest rate paid on bank deposits. Based on this study, a 5% increase in inte

### Write down the profit expression as function of chosen prices and derive the best response. Find the equilibrium prices and profits.

Suppose that three firms which produce a homogeneous output will compete by choosing prices and the market price P is the minimum of the three prices that are chosen. The market demand is determined by the equation p=12-Q. The first firm has a marginal cost of 2, the second has a marginal cost of 4 and the third has a marginal c

### The Leakages/Injections Approach to Equilibrium

Assume that in a small open economy the following describes investment demand, private saving, and the government budget deficit. I = 2400 - 125r S = 1750 + 75r T - G = -350 Suppose that the foreign interest rate is at 4.8 percent a. Is the economy borrowing from or lending to the rest of the world? How much is the a