Explore BrainMass

General Equilibrium

Perfect Competition: Long Run

(See attached file for full problem description) --- Exhibit 2 depicts the market conditions experienced by representative firms in three different price-taker markets. Replicate the diagrams below and answer the following questions. a. Which one of the conditions is true for a representative firm in the apple industry:

Microeconomics problem

Producer Behavior and Costs 1. Town workers occasionally use their own automobiles on official business. The currentreimbursement rate is $.25 per mile. The employees' union complains to the town manager thatnumerous studies show that the cost of operating an automobile is really $.50 per mile, so that the current rate is t

Distribution of costs and benefits

(See attached file for full problem description with diagram) --- 15. (Distribution of Costs and Benefits) Suppose that the government decides to guarantee an above-market price for a good by buying up any surplus at that above-market price. Using a conventional supply-demand diagram, illustrate the following gains and a

Competitive firms and the cost function

In the market for widgets the market demand curve is given by: P=50-0.05Q The market is competitive and each firm has total costs given by: C(q) = 640 + (0.1)q^2 (a) Find the equilibrium i. output of each firm ii. price iii. market quantity iv. Number of firms (throughout this question ignore the indivisibility

Short run equilibrium & units of output

If the total cost schedule for a perfectly competitive firm is and if market price is $60, how many units of putput will the firm produce? a. 0 units of output because the firm shuts down b. 2 units of output c. 3 units of output d. 4 units of output e. none of the above Output Total Cost 0 $10 1


Please give me your answers to these study questions. If you are not sure, can you give me a web site to go to? 1-1. In a monopoly market, a. one firm is the only supplier of a product for which there are no close substitutes. b. entry into the market is blocked. c. the firm can influence market pri

Labor, capital, & inputs & outputs

This is a 4 part question: A manufacturer is hiring 20 units of labor and 6 units of capital (bundleA). The price of labor is $10 and the price of capital is $2 and at A the marginal products of labor and capital are both equal to 20. 1.Beginning at A if the manufacturer increases labor by 1 unit and decreases capital by

Price Ceilings/Discriminations

1. Consider a price ceiling imposed on a monopoly that is set below the competitive price. Design a diagram showing the monopoly equilibrium in this case. Use your diagram to show that a price ceiling set this low will create a shortage. 2. What conditions must hold for a firm to be able to practice price discrimination? How

Verify Answers

If the workers at a firm successfully negotiate a wage increase, a. The demand curve for the product the firm produces shifts rightward. b. The demand curve for the product the firm produces shifts leftward. c. The supply curve for the product the firm produces shifts rightward. d. The supply curve for the product the f


Please provide a economic definition for: 1. Inflationary gap. 2. Marginal propentsity to save 3. shortage 4. ceteris paribus 5. nominal income 6. imtermediate foo 7. purchasing power 8. law of increasing oppotunity costs


When the economy is in equilibrium,________________. a. there are increases in inventory b. there are decreases in inventory c. total expenditures equal total production d. people want to buy more than will be produced Suppose the economy's short-run equilibrium point is to the left of the National Real GDP. Which of

Monetary Policy

Suppose that the federal reserve wishes to keep nominal interest rate at a target level of 5%. Draw a money supply and demand diagram in which the current equilibrium interest rate is 5%. Explain how the federal reserve, using Open Market Operations monetary policy, could keep the interest rate at its target level if the demand

Optimal price/output and economic profits

(Demand) P=$85Q-$0.2Q (Marginal Reveune) MR=$85-$0.4Q (Total Cost) TC=$900+$20Q+$0.8Q2 (Marginal Cost) MC=$20+$1.6Q where P is price (in dollars), Q is output (in thousands of megawatt hours) and TC is total cost (in thousands of dollars). a) if the firm were operating as a pure monopoli

Monopoly Pricing and Output

3 (Monopoly Pricing and Output) Shelley works at University florist in Minneapolis. Every Friday night, the owner of the florist shop gives her the unsold inventory of roses at no cost, which Shelley then sells on Riverside Avenue to pedestrians and motorists. Shelley has a monopoly on rose sales in this area, and faces a d

Marginal Benefits of Abating Emissions

1) Externalities 1 Assume that scientific studies provide you with the following information concerning the benefits and costs of sulfur dioxide emissions: Marginal benefits of abating (reducing) emissions: MB = 400 - 10A Marginal costs of abating emissions: MC = 100 + 20A where A is the quantity abated in millions of

Profit Maximization and Producer Surplus

Profit Maximization and Producer Surplus. Please show all your work. 1) Consider a competitive market in which the market demand curve for microwave ovens is expressed as: P = 1000 - 5Q And the supply of microwave ovens is expressed as: P = 100 + Q Where P is the price per unit and Q is the total number of micr

Game Theory #1 - Dominant Strategy/Nash Eq. (VHS vs. Betamax)

Please show all work and diagrams if necessary. 1) In the initial videocassette market (home use), there were two competing standards: Sony's Betamax and the VHS standard. Using hypothetical payoffs, we can analyze how both manufacturers can benefit from cooperation rather than competition. The following lists the payoff

monetary authority Interest rate

-------------------------------------------------------------------------------- If the monetary authority wants to stimulate an economy in a recession, it often reduces interest rates, and if the inflation rate is low, as it has been in the early part of the current decade, these interest rates can become very low. How effecti

Supply and demand questions

1. Can you illustrate by using supply and demand graphs what happens to the equilibrium price and quantity in each of the following situations. Please dont forget to label the graphs. a. A rise in the price of tea on the market for coffee. b.Expectations of higher prices on the market for housing. c.A decline in the price o

Costly Memories: Tivo, iPod, and X-Box: An Industry Struggles for Profits

Read the following summary of a Wall Street Journal article by Scott Thurm that appeared on 14 October 2004, entitled, "Costly Memories: Tivo, iPod, and X-Box: An Industry Struggles for Profits," and use this information to answers questions 1 & 2: SUMMARY: The TiVo video recorder, the iPod music player and the Xbox game

Competitive Markets

Suppose you are given the following information about a particular industry: QD = 6500 - 100P Market Demand QS = 1200P Market Supply C(q) = 722 + q2/200 Firm total cost function MC(q) = 2q/200 Firm marginal cost function Assume that all firms are identical and that the market is characterized by p

Hemlock Econ problem

Can you please show me the step by step solutions to #2. I have attached the answer key to the practice quesstions. Please provide comprehensive/correct answers. I ONLY need help with #2(Hemlock Bush problem).

Game Theory Simultaneous-Moves

Homer and Marge are playing the attached simultaneous-move, one-shot game. (a) Does either player have a strictly dominant strategy? (b) What is the solution to this game? Is the solution a Nash equilibrium? (c) Suppose that this simultaneous-move game is modeled as a sequential-move game with Homer moving first. Illustrate


1. Interferences such as rent controls and farm price supports reduce the efficiency of markets. In terms of the balance of Qd and Qs, how/why do they do this? Draw a supply & demand graph (or graphs) to illustrate your answer. 2. What is consumers surplus? Why does it exist? Why is consumers surplus at a maximum when the


Dear Sir: I am preparing for the Clep test and I am studying out of a book from the library. However, there are no answers so that I can see if I am on the right track. Can you please assist me witht he following questions? 1. If marginal cost is less than average cost, average cost must fall when more units are produc

Maximizing Profits in a monopolistically competitive model

I'm confused on a concept and I have a test coming up, so I need a bit of help on a discussion I had in class today about profit maximization I don't fully understand... Given a situation (discussed in class today) in a monopolistically competitive market (NOT a monopoly), if my price is $10 for an item and at my present rate

4 Questions...

Just answers the questions below using some economic concepts. 1.) Discuss an example of supply and/or demand that you have observed in the real world. Be don't use the example for the questions below, use something else. 2.)I was thinking about the gas prices, in a way it has to do with supply and demand, right? Because

Several Economics Questions

1) An imperfectly competitive firm has the following demand and cost functions: P=230-20Q C=50+30Q a. What is optimum output? b. What is equilibrium price of this output per unit? c. What is optimal revenue? d. What is total profit? 2) A firm in a perfectly-competitive industry where market price of output prevailing

Need to solve the following problem

11. Economies of scale: a. means that per unit costs decrease as output increases in the long run. b. are caused by loss of team spirit as a firm expands in size. c. is the result of mismeasurement of opportunity costs. d. occur when per unit costs increase as one input is added to production. 12. Kellogg's, the bre