Demand and Supply Schedule for Rap Music CDs Price Quantity Demanded Quantity Supplied 10 70 million 20 million 11 65 million 40 million 12 60 million 60 million 13 55 million 80 million 14 50 million 100 million a) Using the given supply and demand schedule above, graph the supply and demand curves for rap music CD
1. If you raise the price of your good but sell more units is this a violation of the law of demand? 2. How could input suppliers ever lower your profits? 3. An investment has a useful life of 10 years. It costs $150,000. If the interest rate is 4% what stream of annual payments makes it worthwhile. (Each year has equal pay
Starting from the original supply and demand positions, show what happens if the government puts a price floor above the market (equilibrium) price to help producers of root beer. Will this policy help producers? Explain.
What is the identification problem? What effect will this problem have on the regression estimates of a demand function?
1-Explain the differences between shortages and scarcity. In answering this question you should consider the difference between the short run and the long run in economic analysis. 2-Briefly list and elaborate on the factors that will be affecting the supply of the following products in the next several years. Do you think th
1. A monopolist faces demand given by: P=100-4Q and has marginal costs given by: MC=10+2Q a. Draw the demand, marginal revenue and marginal cost curves. Calculate and show how much this firm will sell and what it will charge. b. Calculate the producer surplus with monopoly and the consumer surplus with monopoly. c. How much w
Demand for microprocessors is given by P=35-5Q, where Q is the quantity of microchips (in millions). The typical firm`s total cost of producing chips is Ci=5qi, where qi is the output of firm i. a. Suppose that one company acquires all the suppliers in the industry and there by creates a monopoly. What are the monopolist`s pr
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
Illustrate how the Linder theory of trade works. Explain similarities and/or differences between the Linder model and Heckscher-Ohlin model.
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
Determine whether each of the following would cause a shift of the aggregate demand curve , a shift of the aggregate supply curve, neither, or both. Which curve shifts and in which direction? what happens to aggregate output and the price level in each case? a. the price level b. consumer confidence declines c. the supply o
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,
Characterize and contrast the effects of an economic stimulus under the Keynesian and Classical theories
1. The federal government has recently enacted several large spending bills (i.e. economic stimulus). Use the Modern Keynesian aggregate supply and demand system to tell which curve(s) shift and in which direction. Explain how the price level will be affected by these expenditures in the short-run. Explain how GDP is affected in
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.
"Buy 2, get 1 free." Why is the "1 free" free to the buyer but not to society? At what point if any should the government regulate such promotions like these?
As an economist, you have been asked to address a meeting of a group of international professionals to explain the differences between microeconomics and macroeconomics and to provide real-world examples. * What are the main differences between microeconomics and macroeconomics. * What is an example of each phenomenon. * P
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
What are the long-run effects on prices, output, and profits in monopolistic and monopolistically competitive industries?