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General Equilibrium

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

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?

Perfect competition

Discuss perfect competition and long-run equilibrium. Provide detailed descriptions, definitions and concrete examples of your findings. Additionally, how does the proliferation of global trade and competition contribute to markets moving more away from market-possessing power to more perfect competition? Lastly, when does margi

This is a Managerial Economic Question

A recent report indicatesthat nearly 50 Americans contract HIV each year through blood transfusions.Although every pint of blood donated in the United States undergoes a batteryof nine different tests, existing screening methods can detect only the antibodiesproduced by the b0dyâ??s immune systemâ?"not foreign agents in the bl

Supply and Demand Graph

Consider a market characterized by the following demand and supply conditions: Demand: Px = 50 - 5QX Supply: Px = 32 + QX. Graph the demand and the supply. Label the axis and the equilibrium. The equilibrium price and quantity are, respectively? Looking on how to graph this.

IS Curve - the influence of interest rates

Using the same simple model of the economy, now allow for the impact of interest rates on consumption. The consumption function is: Y=120+0.7Y-10r where r is the level of interest rates. Calculate the equilibrium level of income when interest rates are 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10% Draw the resulting IS curve.

Monopoly Price-Output Decision

Calvins's Barber Shops, Inc., has a monopoly on barbershop services provided in the south side of Chicago because of restrictive licensing requirements, and not because of superior operating efficiency. As as monopoly, Calvin's provides all industry output.. For simplicity, assume that Calvins's operates a chain of barbershops a

Product markets

3. Assume the following cost data are the purely competitive producer: Total product Avg. Fixed Avg. Variable Avg. Total Marginal Product Cost ($) Cost ($) Cost ($) Cost ($) 0

ECONOMIC ENVIRONMENT OF BUSINESS

1. What are the three tools the Federal Reserve uses to change the money supply and interest rates in the economy? Which of these tools is most important and why? 2. In each of the following cases, explain whether the statements are true or false, and why: a. If the real money demand is greater than the real money supply, in

Price Matching and Nash Equilibrium

** Please see the attached file for the complete solution response ** Textbook: Thomas and Maurice, Managerial Economics,9th ed., McGraw-Hill , ISBN 9780073402819 Q1: Suppose the two rival office supply companies Office Depot and Staples both adopt price matching policies. If consumers can find lower advertised prices

Question about a profit-maximizing firm

A profit-maximizing firm in a competitive market is currently producing 1000 units of output. It has average revenue of $10, average total cost of $8, and fixed costs of $200. a. What is profit? b. What is marginal cost? c. What is variable cost? d. If you are operating a business in a perfect competitive market, why woul

Microeconomics Problem Set

1. Some games of strategy are cooperative. One example is deciding which side of the road to drive on. If doesn't matter which side it is as long as everyone chooses the same side. Otherwise, everyone may get hurt. a. Does either player have a dominant strategy? Explain. b. Is there a Nash equilibrium in the game? Explain.

Monopoloy equilibrium and marginal revenues

Demand: Q=90-P/2 so that Marginal Revenue is MR=180-4Q. Total cost: TC=20Q+1000 so that Marginal Cost is MC=20. Q P=D MR MC ATC P* 45 44 43 42 41 40 39 38 37 36 35 Draw the monopoly equilibrium: pl