Assume the following values for the figures attached. Q1 = 20 bags Q2 = 15 bags Q3 = 27 bags. The market equilibrium price is $45 per bag. The price at a is $85 per bag. The price at c is $5 per bag. The price at f is $59 per bag. The price at g is $31 per bag. Apply the formula for the area of a triangle (Area = B
Assume perfect competition. Yoland is a small country that takes world price of corn as given. Its domestic supply and demand for corn is given by the following: Demand: D = 36-3P Supply: S = 3p-9 a. Assume initially that Yoland does not open to trade. What is the autarky equilibrium price and quantity? b. Suppose
Suppose that more companies receive permission to drill for oil in Alaska and U.S.-controlled waters. In addition, assume that the popularity of SUVs declines in favor of smaller, more fuel efficient automobiles. What will be the result on the market (supply, demand, price, and quantity) for oil in the U.S.? How does this move the supply and demand curve? In this situation the supply would be so high that it would cause a price war causing the cost of a barrel of oil to drop. Because of the more fuel efficient smaller cars the demand for gas would not be as high causing the prices of oil to drop even further. This would eventually lead to us having a huge supply of oil and a low demand for it. Question 4: Explain what factors would increase the supply (shift the supply line to the right) of a manufactured product like white bread and what factors would cause a decrease in demand (shift of the demand curve to the left) for that same product. Several factors such as natural disasters, man-made disaster, fire, and food shortages in underdeveloped countries would increase the supply of white bread. This is because the bread could be used to make sandwiches to feed everyone. On the other side of the coin over production, bread going stale, getting old and growing mildew on it would lead to a decrease in demand. All of these problems could be seen as a sign on over production by the bakery. Question 5: Explain the role of economic theory and answer the question, â??what is an economic model?â?
Question 3: Suppose that more companies receive permission to drill for oil in Alaska and U.S.-controlled waters. In addition, assume that the popularity of SUVs declines in favor of smaller, more fuel efficient automobiles. What will be the result on the market (supply, demand, price, and quantity) for oil in the U.S.? How doe
After reading this article why would you suggest that most of the Arab countries and most other third world countries have a larger population percentage under 20 than most industrialized countries? How could this affect the US reconstruction policies in Iraq and Afghanistan? The Supply and Demand for Children In Chapter 1, I distinguished between an economic force and a market force. Economic forces are operative in all aspects of our lives; market forces are economic forces that are allowed to be expressed through a market. My examples in this chapter are of market forces - of goods sold n a market - but supply and demand also can be used to analyze situations in which economic, but not market, forces operate. An economist who is adept at this is Gary Becker of the University of Chicago. He has applied supply and demand analysis to a wide range of issues, even the supply and demand for children. Becker doesn't argue that children should be bought and sold. But he does argue that economic considerations play a large role in people's decisions on how many children to have. In farming communities, children can be productive early in life; by age six or seven, they can work on a farm. In an advanced industrial community, children provide pleasure but generally don't contribute productively to family income. Even getting them to help around the house can be difficult. Becker argues that since the price of having children is lower for a farming society than for an industrial society, farming societies will have more children per family. Quantity of children demanded will be larger. And that's what we find. Developing countries that rely primarily on farming often have three, four, or more children per family. Industrial societies average fewer than two children per family.
After reading this article why would you suggest that most of the Arab countries and most other third world countries have a larger population percentage under 20 than most industrialized countries? How could this affect the US reconstruction policies in Iraq and Afghanistan? The Supply and Demand for Children In Chapter 1,
Please refer attached file for graph. The graph on the left shows the short-run marginal cost curve for a typical firm selling in a perfectly competitive industry. The graph on the right shows current industry demand and supply. a. What is the marginal revenue that this perfectly competitive firm will earn on its 60th unit
Given the current condition of the US economy, do you think US policy makers would prefer to see the $ rise in value, decline in value or stay at its current value? Discuss the advantages and disadvantages to the US economy at this time of a stronger vs. a weaker $. Frame your answer in terms of the current Aggregate Demand and
Explain what economic issues Winston Churchill discussed with Lady Astor? What does their conversation imply about the economic idea of how price affects both the supply and the demand for any good or service? Winston Churchill and Lady Astor There are many stories about Nancy Astor, the first woman elected to Britain's Parl
Let's put dollar amounts on the flows in the circular flow diagram of Figure 2.2. a) Suppose that businesses buy a total of $100 billion of the four resources (labor, land, capital, and entrepreneurial ability) from households. If households receive $60 billion in wages, $10 billion in rent, and $20 billion in interest,
In Japan potential GDP is 600 trillion yen and the table shows aggregate demand and short-run aggregate supply schedules. Price level Real GDP demanded Real GDP Supplied in the short run 75 600 400 85 550 450 95 500 500 105 450 550 115 400 600 125 350 650 135 300 700 a. Draw a graph of the aggrega
1. Please review the video clip from this link http://www.mhhe.com/economics/solman_video_mov/capital_cuban.mov 2. Answer the following questions: Why is a struggle underway in Cuba between social equality and the free market? Why did Cuba permit free markets? Who in the video wants Cuba to remain socialist? Why? Who in
Discuss how each of the following will affect the market clearing price and quantity in each market. How does the supply and/or demand curves will shift in the following cases. a. Incomes rise and the good is a normal good b. The state of technology improves
Given the problem with gasoline prices that we faced not so long back, do you think the government should have intervened and imposed a price ceiling? What would have been the economic effects of this? Discuss the pros and cons.
At some colleges and universities, economics professors receive higher salaries than professors in some other fields. a. Why might this be true? b. Some other colleges and universities have a policy of paying equal salaries to professors in all fields. At some of these schools, economics professors have lighter teaching loads
During the 1980s, 1990s, and the first decade of the 21st century, the United States experienced a significant inflow of capital from abroad. For example, Toyota, BMW, and other foreign car companies built auto plants in the United States. a) Using a diagram of the US capital market, show the effect of this inflow on the rental
Suppose banks install automatic teller machines on every block and, by making cash readily available, reduce the amount of money people want to hold. a. Assume the Fed does not change the money supply. According to the theory of liquidity preference, what happens to the interest rate? What happens to the aggregate demand? b.
1. Define transfer payments and give an example. Explain why transfer payments are not included in GDP. 2. Which components of GDP (C,I,G,X,M) would be affected by the following: a. You buy a pizza. b. You buy a new house. c. Tennessee resurfaces Interstate 40. d. You buy a Lamborghini. e. You buy a new stove. 3. Th
Consider the market for milk. For each of the following events, state (a) whether it affects supply or demand (or both, or neither), (b) which direction supply/demand shifts, (c) the effect on price, and (d) the effect on quantity. 1. The price of orange juice, a substitute, rises. 2. In order to support dairy farmers, the g
Explain how the market for corn would be affected if ethanol, a corn derivative was used to fuel cars in the United States. How would the market be affected if a new technology caused corn farming to be more efficient?
Using the Internet, and/or other sources of literature, locate an article concerning trends in consumption patterns. Prepare a 1,050-1,400-word paper in which you: - Define Economics - Define Microeconomics - Define Law of Supply - Define Law of Demand - Identify the factors that lead to a change in supply and a change i
Question: Jane spends all her income on hot dogs and caviar. Her demand curve for caviar is inelastic at all prices for caviar. Unfortunately, the accident at Chernobyl has caused the supply of caviar to fall and the price to rise. What has happened to Jane's consumption of hot dogs? Explain. You should assume that the accident
Indicate whether each of the following statements is TRUE or FALSE and explain your answer. a. If a monopolist is producing a level of output at which demand is inelastic, the firm is not maximizing profits, and increasing output will decrease total revenue b. When a monopolist maximizes profits, the price is greater than
Market shortages and other concepts are examined in a multiple-choice quiz given with detailed answers.
1. When there is a shortage in a market, prices are likely to rise because: A. Buyers do not wish to buy as much as sellers want to sell. B. Some buyers will attempt to outbid other buyers for the available units of output. C. Higher prices will induce sellers to reduce their production. D. All the above. 2. David
(a) During the recession we have seen a significant increase in unemployment. Use the model of supply and demand to illustrate what has happened. (b) It is a common observation that wages are â??stickyâ? downwards. Discuss the implications of this in relation to part (a) of the question.
Devise a supply and demand diagram for oil showing the effect of a global recession, then explain OPEC's objectives and policies.
i. Consider the supply and demand for oil. Starting from a point where supply and demand are in equilibrium, explain with the use of a diagram how a global recession is likely to affect the equilibrium price and quantity of oil bought and sold. How do the slopes of the supply and demand curves affect your analysis? ii. What o
Select an existing good or service from the Will Bury's Price Elasticity, Incremental Costs, or Thomas Money Service Inc. scenarios, or select an existing business with which you are familiar. Please provide help on writing a business proposal to improve an existing good or service for the chosen company. Include assumptions
Suppose that the unemployment benefits provided by the private sector (firms) are increased permanently, please answer the following questions: A) What will happen to Y (GDP), r (real interest rate), P(price level), and I(investment), in the short run? B) What will happen to Y, r, P, and I, in the long run?
1. Suppose the Federal Reserve sells government securities from its existing holdings to the financial sector and the non-bank public. Trace through the expected consequences of this secondary market action on the banking system - reserves, loanable and investable funds, and deposits; financial markets - bond and stock prices,
The French government has recently raised the retirement age, a decision which is opposed by a large fraction of the French public, especially French students. Use the supply and demand curve to provide an explanation for the opposition of students based on self-interest. (b) To what extent should managers base their plans on
A television station is considering the sale of promotional DVDs. It can have the DVDs produced by one of two suppliers. Supplier A will charge the station a set-up fee of $1,200 plus $2 for each DVD. Supplier B has no set-up fee and will charge $4 per DVD. The station estimates its demand for the DVDs to be given by Q-1,600-200
Consider the supply of money graph above. What has happened to the quantity of money demanded?