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Supply and Demand

The Ricardian model and trade

In our treatment of the Ricardian model We have focused on the case of trade involving only two countries. Suppose that there are many countries capable of producing two goods, and that each country has only one factor of production, labor. What could we say about the pattern of production and trade in this case? (Hint: Try cons

Finding Optimal Output and Profit Level

See the attached file. Suppose that the technology of manufacturing widgets is that every firm entering the market has the same total cost curve, as follows: TC=1000+5Q+0.1Q^2 Where : TC=Total cost per unit time Q=Number of widgets produced per unit time The market demand for widgets is: Q=700-8P Where P=price ($/wi

Money Demand and the Equilibrium Interest Rate

During the summer of 1997, Congress and the president agreed on a budget package to balance the federal budget. The "deal," signed into law by President Clinton in August as the Taxpayer Relief Act of 1997, contained substantial tax cuts and expenditure reductions. The tax reductions were scheduled to take effect immediately, ho

Currency versus the dollar

Suppose the value of the French Franc in terms of the dollar is: 50 on October 12 , and 44 on October 17 . By how much has the Franc appreciated or depreciated against the dollar? The value of the Franc rises against dollar by 12 The Franc has actually depreciated by 12%. The Franc has remained consta

The Federal Reserve System and the regulation of the money supply

1. The Federal Reserve System regulates the money supply primarily by: controlling the production of coins at the United States mint. altering the reserve requirements of commercial banks and thereby the ability of banks to make loans. altering the reserves of commercial banks, largely through sal

Goods and services questions

1. Give an example of a good you purchase or market at your workplace to show why demand curve slopes downwards and why supply curve slopes upwards? 2. What factors shift your demand for goods (note: price is not a demand shifter)? Give an example of how a demand determinant shifted your demand for a good. 3. Describe a r

Absolute and comparative advantage

1. Answer the following series of questions given the data for Israel and Canada below. Daily output: Israel can produce 100 computers or 50 tanks Canada can produce 40 computers or 15 tanks Which country has the absolute advantage in the production of tanks? Why is it this country? Which country has the comparative

Operations and Process Management

Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,000 units. Southeastern estimates its annual holding cost for this item to be $ 25 per unit. The cost to place and process an order from the supplier is $ 75. The company

Demand and Supply Curve: Movement

1. What are possible causes of a movement up or down along the demand curve? What are possible causes of a movement up or down along the supply curve? What the short and long-term effects of these changes can be? 2. What are possible causes of a rightward or leftward shift in the demand curve? What are the possible causes of

Finding Optimal Output Level etc.

Redstone Clayworks, Inc. is located in Sedona, Arizona and manufactures clay fire pits for patios. They are one of about two dozen firms around the world that manufacture and sell clay fire pits for retailers such as Home Depot Lowe's Front Gate, and other upscale home product chains. There is virtually no product differentiat

Supply and demand of park admission

The problem is this: d. Suppose there is a series of snow storms, what does it do to the supply and demand curves? What about if the wages for park rangers increased? Show direction of change on your graph, e. Suppose the prices increases from $2 from the equilibrium price. Use your supply and demand curves to determine th

Demand and Supply curves

The supply and demand for the paper firm is given by: QS=100P-5000 and QD=0.5 i + 0.2A-100P+5000 where Q is the quantity per year, P is price, I is income per household, and A is advertising expenditure. a. If A=$10,000 and I =$25,000, what is the demand curve? b. Plot the demand curve found in part A wit

Economic short answer

A limousine service is located on the north side of Indianapolis. It specializes in transporting people to and from the Indianapolis airport, although it will deliver people anywhere in the Indianapolis area. It competes with taxis and public transportation as well as people deciding to drive their own cars. The demand for the f

Perfect Competition

Use the following data for the exercises below. Price Quantity Supplied Quantity Demanded $20 30 0 $18 25 5 $16 20 10 $14 15 15 $12 10 20

Need help understanding demand and supply factors

4. â??Competition in quality and service may be just as effective as price competition in giving buyers more for their money.â? Do you agree? Why? Explain why monopolistically competitive firms frequently prefer nonprice competition to price competition. 9. Why is there so much advertising in monopolistic competition

supply and demand curves

1. Please explain. What do you think will occur to the price of marijuana if its purchase and sale are legalized? Be specific as to changes in the supply and demand curves. Personal opinion welcome. 2. Please explain How can we use the price elasticity of demand to predict the effects of public policies? Please give two

Discount Rate in the Banking System

(a) Third National Bank is fully loaned up with reserves of $20,000 and demand deposits equal to $100,000. The reserve ratio is 20%. Households deposit $5,000 in currency into the bank. How much excess reserves does the bank now have, and what is the maximum amount of new money that can be created in the banking system as a resu


Efficiency is a hot topic in the media regarding transportation, energy, and many other industries. Explain how perfectly competitive markets use or do not use resources efficiently. PLEASE USE ANY CITATION, EXCEPT WIKIPEDIA, ENCARTA, OR WORLD BOOK

Determining consumer surplus

The following graph illustrates the market for a breast cancer fighting drug without which breast cancer patients cannot survive. What is the consumer surplus in this market? How is it different from normal markets? l l / l l / l l /(supply curve) l l / l l/

Ecomomics: Demand and Supply

Demand function Qd + 20 â?" P Supply Function: Qs = -10 + 2P Q1. Find the equilibrium price and quantity. Show your work Q2. Assume demand function has changed t0o Qd2 = 14-P. What is the new equilibrium price and quantity? Show your work Show all your work i.e. excel spread sheet, graphs and formulas used

Problem Questions

Q1. The average total cost of operating a clinic is $800 per patient if the volume is 100 patients, and $790 per patient if the volume is 110 patients. What is the total cost at each of these two volumes? What is the marginal cost of another case within this range? Q2. Extended care facilities are paid on a per diem basis,

Market for kidneys

Kidney's (transplant) are not allocated through markets. What are the pros and cons of switching to a market for kidneys? (Note: Currently, people can volunteer to donate one of their two kidneys, and getting a kidney is dependent upon your need and prognosis (and sometimes having a relative who is a "match" donate theirs.) Plea

optimal amount of chocolate production

Amityville has a competitive chocolate industry with the (inverse) supply curve Ps =440+Q. While the market demand for chocolate is Pd=1200-Q, there are external benefits that the citizens of Amityville derive from having a chocolate odor wafting through town. The marginal external benefit schedule is MEB =6-0.05 Q. a) Withou

Distinguish between the resource market and the producer market

Exercises 1. Distinguish between the resource market and the producer market in a circular flow model. In what way are businesses and households both sellers and buyers in this model? What are the flows in the circular flow model? Application 1. The famous Swedish economist Assar Lindbeck remarked in his book on ren

Government involvement in the market place

Discuss in detail ONE factor of how government involvement in the marketplace can impact or not impact the economy. Give a real life example of this factor at work. Be sure to concentrate on just this one factor and do not discuss others in your initial post.