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General Equilibrium

Markets, Demand and Supply and the Price System

3.      Using the following schedule, define the equilibrium price and quantity. Describe the situation at a price of $10. What will occur? Describe the situation at a price of $2. What will occur? Price Quantity Demanded Quantity Supplied $1 500 100 $2 400 120 $3 350 150 $4 320

Economics Help

This is a sample of the type of questions that will be on a test. See attached.

Discussing the Dominant Strategy

Suppose two competitors, Coa, Inc., and Han, Inc., are locked in a bitter pricing struggle in the aluminum industry. In the limit pricing payoff matrix, Coa can choose a given row of outcomes by offering a limit price ("up") or monopoly price ("down"). Han can choose a given column of outcomes by choosing to offer a limit price


A firm produces digital watches on a single production line serviced during one daily shift. The total output of watches depends directly on the number of labor-hours employed on the line. Maximum capacity of the line is 120,000 watches per month; this output requires 60,000 hours of labor per month. Total fixed costs come

Several questions

1. The idea that markets adjust rapidly enough to eliminate profit opportunities immediately is called________ a. perfect information. b. market manipulation. c. market efficiency. d. market foolishness. e. amateurs running the market. 2. Seeking to own stocks of different kinds in many mark

Price ceiling

The government has set price ceiling on "whatever the product is", so that there is a shortage. That industry complains to the government that the ceiling price is far below the equilibrium price. The issues would be quality sold = quality bought, the amount customers are prepared to buy at the ceiling price Qd, is significantly

Microeconomic issue

Consists of performing application-oriented exercises wherein the specific economic principles learned in this course are put to practical use. You must translate your ideas into economic analysis using the specific economic theory and economic terms. Choose of one topical microeconomic issue out of two possible alternatives

Short run, total cost

1.In the model of monopolistic competition, there can be short-run a. losses or profits but there must be profits in long-run equilibrium. b. profits but there must be losses in long-run equilibrium. c. losses or profits but there must be losses in long-run equilibrium. d. losses or profits but there must be neither profit


5. Nintendo and Sony Playstation are each planning to introduce one new game into the market. Each is considering three different kinds of games: an urban action game like Grand Theft Auto, an adventure game like Tomb Raiders, or a strategy game like SimCity The table shows each firm's profits (Sony's profit first) in millions o

Revenue Maximization and Shut Down Decisions for a Video Store

Please see chart attached and respond the following questions: a. If the owner of this video store wants to maximize profits, how many DVD's should the store rent per day and what price should be charged? explain your answer b. Should it continue to produce in the short run? Why? c. How much are fixed costs? d. H

Supply and Demand Curves

Please refer attached file for graph. Use the accompanying graph, which shows the marginal cost and average total cost curves for the store Zapateria, a perfectly competitive firm. a.How many pairs of shoes will Zapateria produce if the market price of shoes id $70 a pair? b.What is the total profit Zapateria produce if t

Shifts in supply and demand..

3. Given the following data, identify the amount of shortage or surplus that would exist at a price of (a) $5.00 _____________ (b) $3.00 _____________ (c) $1.00 _____________ A. Price $5.00 $4.00 $3.00 $2.00 $1.00 $5.00 $4.00 $3.00 $2.00 $1.00 B. Quantity demanded C. Quantity supplied Al 1 2 3 4

Demand and supply shifts

1) How will the following situations impact the helicopter tour business? Using the Demand and Supply model anpredict what could happen to the demand/supply curves and to equilibrium price. Include the curves in your response. a.The impact on the business in the event of real incomes decrease(ceteris paribus). b.The impa

Determining Equilibrium output and profits

2 companies produce the same item. The companies each determine their own output and the combined output of the two is sold at the market price. Company A has controls its costs better than its competitor, B. The demand curve is P=280-2(Q1+Q2) and the cost function is C1(Q1)=3Q1 and C2(Q2)=2Q2 Find out the followings 1

Supply and Demand

Draw supply and demand diagrams for market A for each of the following. Use these diagrams to determine how each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity. ( This is a competitive market.) Your answer should state whether price and quantity rise, fall, or remain unchange

the effect on the marginal propensity to spend

Question 1 Consider the following information about the demand for goods and services. All variables are in billions of dollars. Consumption Function: C = 1000 + 0.9 YD Investment Demand: I = 1400 Government Purchases: G = 1500 Taxes: Ta = 1000 + 0.15 Y Transfer Payments: Tr = 1100 Exports

Short answer questions of types of goods, supply and demand

1. A ------------ ----------- is a legal maximum price above which a commodity cannot be sold. 2. Cars and gasoline are a good example of-----------(complements, inferior goods, substitutes) 3. The law of ---------- states that the quantity demanded is inversely to price. 4. If the demand for a good falls whe

Movement and shifts of demand curve, changes in supply/demand

Please explain in detail the difference between a movement along and shift of the demand curve. Show the impact on the equilibrium price and quantity that results from (1) an increase in demand (2) an increase in supply (3) an increase in both supply and demand Please provide an example of the role of supply and

Assume that you have the following open economy where C = 10 + 0.8(Y-T); I = 10; G = 10; T = 10 and imports and exports are given by IM = 0.3Y and X = 0.3Y* respectively where Y* is foreign output.

Assume that you have the following open economy where C = 10 + 0.8(Y-T); I = 10; G = 10; T = 10 and imports and exports are given by IM = 0.3Y and X = 0.3Y* respectively where Y* is foreign output. Then solve for the equilibrium output in the domestic economy given Y*. What is the multiplier effect for this open economy? What h

Basic Characteristics of Market Structures

1. List the basic characteristics of pure monopoly, monopolistic competition and oligopoly. Under which of these market classifications does each of the following most accurately fit? (a) a supermarket in your hometown; (b) the steel industry; (c) a Kansas wheat farm; (d) the commercial bank in which you or your family has an ac


If the price level doubles, aggregate expenditures will? In the multiplier model, if the mpe is x, then the multiplier is? The multiplier model assumes that the price level is? The multiplier equals? If an increase in income of $125 causes aggregate expenditure to increase from $1,250 to $1350, then the marginal pr

The IS and LM Curve

Derive the LM curve by one of the standard methods used in Macroeconomics. Be sure to label all axis and curves on your graph. Explain in writing to what your derivation brings equilibrium and how it accomplishes this. Derive the IS curve by one of the standard methods used in Macroeconomics. Explain in writing to what marke

Game Theory practice questions

Practice Exam Faculty of Continuing Education Economics August 18, 2008 1. This game involves two roommates. Each of them has 2 hours that can be devoted either to preparing a common meal or to studying. The payoff to person i, (where i = 1; 2), to hours spent studying, Si, is given in the table on the left below. T

Tax revenue help

Problems attached. No graphs required, simple computations only.

Market Equilibrium in Perfect Competition

1.Use the following to demonstrate why a firm producing at the output level where MR=MC will also be able to maximixe its total profit. ( ie be at the point where marginal profit is equal to zero P=170-5Q TC+ 40= 50Q + 5Q2 please show the steps 2.In a perfectly competitive market a firm had to be either "good or lucky" expl

Monopolistic competition and Oligopoly

Pricing by monopolistic competition. I need assistance on the following problem. I have completed the assignment; however, not sure that my answers are correct. Game Theory. Suppose there are only two automobile companies, Ford and Chevrolet. Ford believes that Chevrolet will match any price it sets, but Chevrolet too is in

Impact of Changes in MPC on Equilibrium GDP

A. Suppose that the economy starts at equilibrium and the mpc= 0.75. What would be the effect of a $300 increase in government spending once all the rounds of the multiplier process are complete? b. suppose that the economy starts at equilibrium and the mpc = 0.8. What would be the effect of a 300 increase in taxes onc

Duopoly decisions of production

Duopoly decisions to produce In the duopoly, two rail transport firms compete by choosing a quantity of production simultaneously . The inverse market demand function of rail transport is expressed by p = 18 - q, where q = q1 + q2 . The production costs of the both firms are identical, for the Firm 1 costs are c1 = 0.5q12 a