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# General Equilibrium

### Characterize equilibria in this case.

in the country of less developed, conventional telephones are frequently breaking down or overloaded, and it takes months to get a new line installed. Companies are thinking of adopting new parallel wireless system offered by private company, which for now can poorly and sporadically interconnect with local conventional phones,

### Given data for Total Cost and Total Revenue, calculate how much output a firm should produce to maximize profit. Show the result graphically.

Consider total cost and total revenue given in the table below: quantity total cost total revenue 0 \$8 0 1 \$9 8 2 \$10 16 3 \$11 24 4 \$13 32 5 \$19 40 6 \$27 48 7 \$37 56 a. Calculate profit for each quantity. How much should the firm produce to maximize profit? b. Calculate marginal revenue and marginal cost fo

### Consider the following events: Scientists reveal that consume

Consider the following events: Scientists reveal that consumption of oranges decreases the risk of diabetes and , at the same time, farmers use a new fertilizer that makes orange trees more productive. Illustrate and explain what effect these changes have on the equilibrium price and quantity of oranges.

### An Upward Sloping Supply Curve

If the supply curve of savings is upward sloping, a comprehensive wealth tax will: a. increase the market rate of interest. b. reduce the market rate of interest. c. have zero excess burden. d. have no effect on investment

### Market Analysis is achieved.

Q1) Market Analysis: Suppose that demand for oranges is given by the following Equations: Q= -200P + 1000 With quantity (Q) measured in oranges per day and price (P) measured in dollars per orange. The supply curve is given by Q= 800P A. Compute the equilibrium price and quantity of oranges. B. Suppose that an excise ta

### Game Theory: Inside Oligopoly

In a two play, one shot simultaneous-move game each player can choose strategy A, each earns a payoff of \$500. If both players choose strategy A, each ears a payoff of \$500. If both players choose strategy B, each earns a payoff of \$100. If player 1 chooses strategy A and player 2 chooses strategy b, then player 1 earns \$0 and p

### Show from national income accounting that A. An increase in taxes (while transfers remain constant) must imply a change in net exports, government purchase, or the saving-investment balance. B. An increase in personal disposable income must imply an increase in consumption or an increase in saving. C. An increase in both consumption and saving must imply an increase in disposable income. [For both B and C assume that there are no interest payments by household or transfer payments to foreigners)

Show from national income accounting that A. An increase in taxes (while transfers remain constant) must imply a change in net exports, government purchase, or the saving-investment balance. B. An increase in personal disposable income must imply an increase in consumption or an increase in saving. C. An increase in bo

### Profit maximization by corner gas stations.

The Hull Petroleum Company and Inverted V are retail gasoline franchises that compete in a local market to sell gasoline to consumers. Hull and Inverted V are located across the street from each other an can observe the prices posted on each other's marquees. Demand for gasoline in this market is Q=50-10P, and both franchises

### Applied Problem

Florida Citrus Mutual, an agricultural cooperative association for citrus growers in Florida, needs to predict what will happen to the price and output of Florida oranges under the conditions below. What are you predictions? For each part, sketch a graph showing the appropriate demand and supply analysis. A. A major freeze dest

### Labor-Leisure Constraint Calculation

Suppose Madison has 16 hours in the day for work or leisure. She earns \$5 an hour and receives \$15 each day in non-labor income. Draw her labor-leisure constraint. Also, suppose Madison maximizes her utility by working 8 hours a day. Solve for the amount of leisure consumed and the amount of income earned. Indicate these equili

### Effect of a natural disaster on market supply and demand.

Suppose you are asked to do a market analysis in an area in which a natural disaster has recently occurred. For example, Nashville after the Spring floods or New Orleans after Hurricane Katrina. Other than building supplies, choose a market for a good or service that will be affected. Will demand or supply be affected? What h

### What is the impact of a \$20 billion tax cut on consumption and GDP?

Assuming an economy can be represented by the following simplified model (all values are measured in \$billion): C=200+0.5Yd, I=100, G=150, TP=100, X=M, Yd=Y-TP Please discuss the impacts of a \$20 billion tax (TP decrease by 20) cut on equilibrium Y (GDP) and C (personal consumption).

### Equations of the IS and LM Curves

Consider the following numerical version of the IS-LM model in a closed economy: C=400+0.5Yd; I=700-4000r+0.1Y; G=200; TP=200; Yd=Y-TP RLMD=0.5Y-7500r; RLMS =500; X=M A) Find the equations for the IS curve and LM curve. B) Solve for equilibrium real output (Y), interest rate (r), consumption (C), and Invest

### new equilibrium price and quantity in the market

After a decade long advertising war, NIK and REB are the only two surviving firms in the sport-shoe market. The yearly demand in this market is given by P=100-0.5q. Both firms produce shoes at a constant marginal cost of \$10 per pair and have no fixed costs. Your analysis of the industry suggests that they are engaged in monop

### Price in this market in the absence of government intervention

Question 4. A study by the CDC has shown that preventive care measures impose sizable positive externalities on others. To keep things simple, in this problem we will study the consumption of preventive care by a single individual. Let q denote the consumption of preventive care by the individual. The CDC has estimated that

### Calculating long run equilibrium price and output level

Assume that two companies (A and B) are duopolists who produce identical products. Demand for the products is given by following linear demand function: P= 200-QA-QB Where QA and QB are quantities sold by the respective firms and P is the selling price. Total costs functions for the two companies are TCA = 1,500 + 55QA

### Games of Strategy

Some games of strategy are cooperative. One example is deciding which side of the road to drive on. It doesn't matter which side it is as long as everyone chooses the same side. Otherwise, everyone may get hurt. (Please refer to the diagram) a. Does either player have a dominant strategy? Explain. b. Is there Nash equili

### Steps for a monopolist determine level of output

A single firm operating as a monopolist wishes to determine the level of output to produce that will maximize sales revenue. a Provide first order conditions for revenue maximization b show graphically and provide an economic explanation for the equilibrium position. c How does the profit maximizing equilibrium position dif

### Questions about marginal external costs are posed.

Questions 1. The marginal external cost associated with air pollution increases with the annual output of a polluting industry. At the current competitive equilibrium level of output per year the marginal external cost is \$10 per unit of output. To achieve efficiency, a) a corrective tax of \$10 per unit of output is req

### The provider is assumed to maximize profits. Determine the providerâ??s equilibrium wage and how many nursing units it will hire. The provider is a monopsonist, which means it is the sole purchaser of labor in the market.

The provider is assumed to maximize profits. Determine the providerâ??s equilibrium wage and how many nursing units it will hire. The provider is a monopsonist, which means it is the sole purchaser of labor in the market. Clinic visit \$2 revenue/visit labor supply function wage/hr. Quantity of nurses Tota

### Production Possibilities Frontier

Can you please help on sketching a PPF for two goods that you choose. Assume the economy is in equilibrium at one point on the curve (label that point A)? Explain which events would cause the economy to move from point A to either a point inside the curve, another point on the curve, or a point outside the curve.

### Tutorial Questions

Q8.1 Demand Side Equilibrium & Multiplier Consider an economy with the following characteristics (in \$ billion): C = 60 + 0.8Yd (where Yd = disposable income) t = 0.2 I = 40 G = 30

### Market price and market output

Propylene is used to make plastic. The propylene industry is perfectly competitive and each producer has a long run total cost function given by LTC= 1/3 Q^3 -6Q^(2 )+40Q Where Q denotes the output of the individual firm. The market demand for propylene is X =2200 -100P Where X and P denote the market output and

### Long run equilibrium of a perfectly competitive industry

1- characterize the long run equilibrium of a perfectly competitive industry in which average costs are U-shaped as output increases, under both restricted and free entry. 2-Discuss the senses in which a perfectly-discriminating monopolist is efficient or inefficient.

### Monopolies

1) Are monopolists guaranteed of making economic profits? 2) Explain the long run equilibrium situation for a monopolistically competitive industry. Give two examples of industries that fit under this category.

### A perfectly competitive firm

Question: 1. The graph the follows (see attached file) shows an individual firm in long-run equilibrium. In which market structure is this firm operating? Explain. Compare the long run quantity and price to those of a perfectly competitive firm. What accounts for the difference? Is the equilibrium price greater than, equal to,

### Competitive Market Equilibrium

Syracuse Paper supplies printer paper in upstate New York. Like the output of other wholesale distributors, Syracuse Paper must meet strict guidelines and the printer paper supply industry can be regarded as perfectly competitive. Total and marginal cost relations are: TC = \$3,600 + \$5Q + \$0.01Q2 MC = dTC/ dQ = \$5 + \$0.02

### Managerial Economics

The supply and demand equations for a hypothetical perfectly competitive market are given by QS = -100 + 3P and QD = 500 - 2P. a. Determine the firm's optimal (i.e. profit maximizing) level of output and its profit or loss. b. Graph the MR and MC curves and use the graph to find the output at which the two curves intersec

### Surplus and shortage discussion

Please assist me by explaining the concepts of the Market Equilibrating Process and how it relates to prior real world experience. â?¢ Explain the market equilibrating process in relation to your experience. Include academic research to support your ideas. â?¢ Explain following components in your explanation: Law o

### Finding consumer surplus and Govt's revenue

1. If Q=460-4P, What is consumer surplus when P=\$35 & \$25 respectively? what happens to consumer surplus when price of a good decreases? 2. If Qs= 0.25P-0.5 and Qd=7-0.5P Suppose a \$6/unit excise tax is imposed on the good, what is the new equilibrium price and how much revenue does the govt receive from this tax?