supply functions for Eye-de-ho Potatoes are as follows: QD = -1‚450 - 25P + 12.5PW + 0.2Y‚ (Demand) QS = -100 + 75P - 25PW - 12.5PL + 10R‚ (Supply) where P is the average wholesale price of Eye-de-ho Potatoes ($ per bushel)‚ PW is the average wholesale price of wheat ($ per bushel)‚ Y is income (GNP in $ billions)‚ PL is the average price of unskilled labor ($ per hour)‚ and R is the average annual rainfall (in inches). Both QD and QS are in millions of bushels of potatoes. A. When quantity
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How much does demand for DVRs change if the p rises by $40? A) drops by 10‚000 DVRs B) increases by 16‚000 DVRs C) drops by 2‚500 DVRs D) increases by 4‚000 DVRs Answer: A 5) Consider the demand function Qd = 150 - 2P. The effects of other determinants of Qd is reflected in A) the intercept of the function. B) the slope of the function. C) neither the slope nor the intercept of the function. D) in both the slope and the intercept of the function. Answer: D 6) As
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possibilities for two items—chairs and tables. Combination | Chairs | Tables | A | 0 | 6 | B | 8 | 5 | C | 15 | 4 | D | 21 | 3 | E | 26 | 2 | F | 30 | 1 | G | 33 | 0 | (a) What is the opportunity cost of producing the first table? (33-30)/1=3 (b) What is the opportunity cost of producing the third table? (26-21)/1=5 (c) What is the opportunity cost of producing the sixth table? (8-0)/1=8 (d) Draw the production-possibilities curve for chairs and tables on a
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perfectly competitive service market are: QS = 2P - 20 | (Supply) | QD = 80 - 2P | (Demand) | Where Q is thousands of hours of floor reconditioning per month and P is the price per hour. a. | Algebraically determine the market equilibrium price/output combination. | b. | Use a graph to confirm your answer. | (For the graph‚ use prices: 10‚ 20‚ 30‚ 40‚ 50‚ 60‚ 70‚ 80‚ 90‚ and Quantities: 5‚ 10‚ 15‚ 20‚ 25‚ 30‚ 35‚ 40‚ 45‚ 50‚ 55‚ 60‚ 65.) 2. Or Kids is a representative
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brought about by a change in price as being the sum of these two isolated changes. In algebraic terms‚ we ∆Qd ∆Qd ∆Qd can write: = substitution effect + income effect. Our strategy will be to find the income ∆P ∆P ∆P effect; the substitution effect is then found as the difference between the total effect (the left-hand side of the equation) and the income effect. ∆Qd ∆I ∆Qd Consider‚ then‚ the income effect term. It can be rewritten as . income effect = ∆I ∆P ∆P That
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much to produce and make other important decisions. As one moves forward with tackling the assignment‚ one will first find that the elasticity must be computed for each independent variable. With the regression analysis‚ quality demand (QD) represents the equation QD = -5200 – 42P + 20PX + 5.211 + .20A + .25M. The product price (P) can have a negative relation to quality demand as well. The price of the leading competitor is represented by (PX). As price changes demand‚ this is the result (PX). Income
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Analysis Price 12 PE 8 Shortage 16 QE Price Ceiling DD Quantity Price Ceiling SS Observation: a).Price ceiling‚ which is beneath the market clearing price (equilibrium price)‚ creates shortage; b). Principle of voluntary exchange: Q(p) = minimum [QD(p)‚ QS(p)] (Cannot force firm to produce more when they don’t want to; cannot force consumer to demand less when they want to); c). Non-price rationing: free markets ration goods with price. Markets under price ceiling develop the rationing mechanism
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* Question 1 0 out of 1 points | | | Duopolists A and B face the following demand curves: QA = 120 2PA + PB and QB = 120 2PB + PA. If both firms have zero marginal cost and they form a cartel‚ what is the profit-maximizing price and quantity?Answer | | | | | Correct Answer: | a. P = 60‚ Q = 120 | | | | | * Question 2 1 out of 1 points | | | Total surplus in a market is a measure of:Answer | | | | | Correct Answer: | c. social welfare created by the market
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___________________________________________________________________________ 1. In a competitive market‚ the market demand is Qd = 60 - 6P and the market supply is Qs = 4P. A price ceiling of $3 will result in a A. B. C. D. shortage of 30 units. shortage of 15 units. surplus of 30 units. surplus of 12 units. 2. In a competitive market‚ the market demand is Qd = 60 - 6P and the market supply is Qs = 4P. The full economic price under a price ceiling of $3 is A. B. C. D. 6. 7. 8. 9. 3.
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ECON *120: Principles of Microeconomics Spring 2010 I. FOUNDATIONS OF ECONOMICS A. Scarcity‚ Production Possibilities‚ Efficiency and Exchange Section I.A Learning Objectives: • Define or explain a number of basic economic terms and concepts. • Explain‚ illustrate‚ and apply marginal analysis. • Explain‚ illustrate‚ and apply the production possibilities model. • Explain‚ illustrate‚ and apply the law of comparative advantage. 1. “Life is Economics” Q: Is this statement true or false? Why? 2. Economic
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