including the tax‚ the amount sellers receive net of the tax‚ and the quantity of the good sold? 5. A recent study found that the demand and supply schedules for Frisbees are as follows: Price per Frisbee Quantity Demand Quantity Supplied $11 1 million 15 million Frisbees 10 2 12 9 4 9 8
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1. What is the mechanism by which the "invisible hand" pushes markets to equilibrium? Price is what drives economic activity in the market. Price will be determined by what the good or service is worth to the buyer and how much the seller believes the consumer is willing to pay. Equilibrium is balanced when the sellers have sold all they want to sell at a given price and when buyers have brought all they have brought at a given price. The “Invisible hand” is a description used to refer to the free
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〖〖Covariance〗_(ICE CREAM‚FRISBEES)=σ〗_R1‚2= ∑_(i=1)^n▒〖{P_(i ) [(R_(1‚i )–E[R_1 〗])([R_(2‚i )–E[R_2 ])} 〖Covariance〗_(ICE CREAM‚FRISBEES)={.5[(-.02- .09)(.06-.09)+(.20-.09)(.12-.09)]} = .5[(-.11)(-.03)]+ [(.11)(.03)] = .0165 + .0165= .0033 〖Covariance〗_(ICE CREAM‚UMBRELLAS)={.5[(-.02- .09)(.15-.09)+(.20-.09)(.03-.09)]} = .5[(-.11)(.06)]+ [(.11)(-.06)] = -.0033 + -.0033 = -.0066 Correlations= P_(R1‚2 )= σR1‚2/(σR1 σR2 ) 〖Correlations〗_(ICE CREAM‚FRISBEES)= .0033/((.11)(.03))=
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Written Assignment 1 1. What is the mechanism by which the "invisible hand" pushes markets to equilibrium? Adam Smith pioneered the concept of the “invisible hand”‚ which allows households and firms to interact and compete with one another. The invisible hand is based on Smith’s belief that consumers will always want the best price‚ and the producers will always want to maximize profit. Basically‚ if the government would not interfere in what consumers could buy and what producers could produce
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ECO 111 Answer Key – WA#1 1. The "invisible hand" of the marketplace represents the idea that even though individuals and firms all act in their own self-interest‚ prices and the marketplace guide them to do what is good for society as a whole. Note: the “invisible hand” does not guarantee equilibrium. At the same time‚ it does not imply wealth redistribution – which is the worst thing for any economy. The easiest way to understand wealth redistribution is with the following example: suppose
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Name: ________________________ Class: ___________________ Date: __________ ID: A CH 11 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ ____ ____ 1. Timmy makes $100 per week as a taxidermist. He spends all this income to buy pizza and hair gel. The price of a pizza is $10 and the price of a bottle of hair gel is $4. If Timmy buys 5 bottles of hair gel‚ then he buys ____ pizzas. a. 10 b. 4 c. 8 d. 20 e. None of the above answers is correct.
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Homework Assignments Problems & Applications Chapter 1 Homework 4. You win $100 in a basketball pool. You have a choice between spending the money now or putting it away for a year in a bank account that pays 5% interest. What is the opportunity cost of spending the $100 now? 5. The company that you manage has invested $5 million in developing a new product‚ but the product is not quite finished. At a recent meeting‚ your salespeople report that the introduction of competing products
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-In 1928 James Ford Bell orchestrated a giant merger of the nation’s largest regional milling companies; the company came to be known as General Mills and it was the largest flour Milling Company in the world. Throughout the years‚ General Mills has grown into much more than just a milling company. -In the mid 60’s‚ they closed over half their mills and began marketing to consumers. Over the years they developed or purchased a diverse line of products that included kitchen appliances
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bodies Of thousands of dead fish that washed up From Lake Ontario onto Burlington Beach‚ Where we swam and played‚ before we ever heard the word pollution. My brothers and I flung those smelly dead darts at one another‚ Prior to the invention of Frisbees. Fish scales were embedded in our fingers. Our feet were cut by those dead silver razors as we ran across the hot sand‚ before we heard the word pollution‚ Before we saw the stats on cancer in our town— No absolution forthcoming‚ no reprieve from
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Toy A teddy bear A toy is any object that can be used for play. Toys are associated commonly with children and pets. Playing with toys is often thought to be an enjoyable means of training the young for life in human society. Different materials are used to make toys enjoyable and cuddly to both young and old. Many items are designed to serve as toys‚ but goods produced for other purposes can also be used. For instance‚ a small child may pick up a household item and "fly" it through the air as
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