Homework Answers
Over the range of p1p2 price elasticity of demand is greater for D1 than for D2
Since the two lines are parallel the difference in quantity would stay the same but the change is percentage of quantity demanded in D1 would be more than that of D2.
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Answer and explain why:
D D2 4. The above diagram shows two product demand curves. On...
4. A kinked demand curve can explain rigidity of oligopolists' administered price. What does inflexible, administered...
4. A kinked demand curve can explain rigidity of oligopolists' administered price. What does inflexible, administered pricing mean? a. b. Why would an oligopolist have little motivation to change its price frequently? In the diagram below, assume that the equilibrium price is at point G. Is this over costs? Is the oligopolist earning economic profit? Explain C. d. At G there is a kink in the effective demand and marginal revenue curves of the oligopolist. Why? i. If it cuts...
Question 4. Choose the correct answer for each of the following 1) The above figure shows...
Question 4.
Choose the correct answer for each of the following
1) The above figure shows the supply
and demand curves for rice in the U.S. and Japan. Assume there is
no trade between the two countries. If bad weather causes the
supply curves in each country to shift leftward by the same amount,
then
the price will increase in both countries.
the price will decrease in both countries.
the change in price cannot be determined.
None of the above....
answer and explain E) 1/3 percent decrease in the quantity demanded for Good X. ........ Supply...
answer and explain
E) 1/3 percent decrease in the quantity demanded for Good X. ........ Supply ..... 8. For the diagram to the right, calculate the value of price elasticity of supply over the price range from $15 to $25. A) 0.8 B) 0.2 C) 0.0533 D) 1.25 E) 5 F) 0.2667 G) 1.333 H) 0.75 I) none of the above 8 quantity 24 9. If at the current price, demand is elastic, then decreasing the price will A) Increase...
500 1000 1500 16) The above figure shows the demand and supply curves in the market...
500 1000 1500 16) The above figure shows the demand and supply curves in the market for milk. If the government imposes a quota at 500 gallons, calculate the change in the consumer surplus. Assume that prices stay the same. A) ACS--150 D) ACS- 200 C) ACS--500 B) aCS--250 a, 17) The above figure shows supply and demand curves for milk. In an effort to help farmers, the passes a law that establishes a s3 per gallon price support. To...
40. S1 D1 Quantity Refer to the diagram, in which SI and DI represent the original...
40. S1 D1 Quantity Refer to the diagram, in which SI and DI represent the original supply and demand curves and $2 and D2 the new curves. In this market increase in demand has been more than offset by an increase in supply point M shows the new equilibrium position. C) the new equilibrium price and quantity are both greater than originally D) the equilibrium position has shifted from M to K 41. Producer surplus is the difference between A)...
21. A positive income elasticity of demand coefficient indicates that a. a product is an...
21. A positive income elasticity of demand coefficient indicates that a. a product is an inferior good b. two products are substitute goods c. two products are complementary goods d. a product is a normal good 22. All the combinations of two products that will yield the same total utility to a consumer are reflected in a. the budget line b. the marginal rate of substitution c. an indifference curve d. the...
4. (Aggregating Demand Curves and finding Inverse Demand) The demand function for a certain good is:...
4. (Aggregating Demand Curves and finding Inverse Demand) The demand function for a certain good is: Qu(p) - 100 -p in the US, and Q. (p) - 150 - 2p in Japan. The price p is in a common currency. a. In a single diagram, graph the individual country demand functions in the US and Japan. b. In the same diagram, draw the aggregate demand function (for US + Japan): Qup). c. In your diagram, there will be three relevant...
The figure shows supply and demand curves before the introduction of a specific tax. Which of...
The figure shows supply and demand curves before the introduction of a specific tax. Which of the following statements is correct? D A PO D 0 $ P. tax S $ Po P: S 0 0 Q. (a) Demand is more elastic than supply at price po. (b) When a specific tax is introduced the price paid by consumers increases by less than the price received by producers falls. (c) The consumers bear a smaller proportion of the specific tax...
Use the Law of Demand to explain why all consumers must receive a surplus whenever they...
Use the Law of Demand to explain why all consumers must receive a surplus whenever they purchase more than one unit of a product but may receive no surplus if only one unit is bought. Make up a numerical example to illustrate. Provide two reasons why consumer surplus must increase when the price of a product falls? Explain fully why taxing a product leads to deadweight loss. Use appropriate graphs to explain why the deadweight loss is greater the more...
QUESTION 3 The following diagram shows the domestic demand and domestic supply curves in a market....
QUESTION 3 The following diagram shows the domestic demand and domestic supply curves in a market. Assu $1 per unit T Price P st . o 0 - D 100 200 300 400 500 Quang Suppose the country imposes a S1 per unit tariff a What is the consumer surplus with the tarift? b. What is the producer surplus vith the tarift? How much tax retenue is generated by the tarif
4. A kinked demand curve can explain rigidity of oligopolists' administered price. What does inflexible, administered pricing mean? a. b. Why would an oligopolist have little motivation to change its price frequently? In the diagram below, assume that the equilibrium price is at point G. Is this over costs? Is the oligopolist earning economic profit? Explain C. d. At G there is a kink in the effective demand and marginal revenue curves of the oligopolist. Why? i. If it cuts...
Question 4.
Choose the correct answer for each of the following
1) The above figure shows the supply
and demand curves for rice in the U.S. and Japan. Assume there is
no trade between the two countries. If bad weather causes the
supply curves in each country to shift leftward by the same amount,
then
the price will increase in both countries.
the price will decrease in both countries.
the change in price cannot be determined.
None of the above....
answer and explain
E) 1/3 percent decrease in the quantity demanded for Good X. ........ Supply ..... 8. For the diagram to the right, calculate the value of price elasticity of supply over the price range from $15 to $25. A) 0.8 B) 0.2 C) 0.0533 D) 1.25 E) 5 F) 0.2667 G) 1.333 H) 0.75 I) none of the above 8 quantity 24 9. If at the current price, demand is elastic, then decreasing the price will A) Increase...
500 1000 1500 16) The above figure shows the demand and supply curves in the market for milk. If the government imposes a quota at 500 gallons, calculate the change in the consumer surplus. Assume that prices stay the same. A) ACS--150 D) ACS- 200 C) ACS--500 B) aCS--250 a, 17) The above figure shows supply and demand curves for milk. In an effort to help farmers, the passes a law that establishes a s3 per gallon price support. To...
40. S1 D1 Quantity Refer to the diagram, in which SI and DI represent the original supply and demand curves and $2 and D2 the new curves. In this market increase in demand has been more than offset by an increase in supply point M shows the new equilibrium position. C) the new equilibrium price and quantity are both greater than originally D) the equilibrium position has shifted from M to K 41. Producer surplus is the difference between A)...
4. (Aggregating Demand Curves and finding Inverse Demand) The demand function for a certain good is: Qu(p) - 100 -p in the US, and Q. (p) - 150 - 2p in Japan. The price p is in a common currency. a. In a single diagram, graph the individual country demand functions in the US and Japan. b. In the same diagram, draw the aggregate demand function (for US + Japan): Qup). c. In your diagram, there will be three relevant...
The figure shows supply and demand curves before the introduction of a specific tax. Which of the following statements is correct? D A PO D 0 $ P. tax S $ Po P: S 0 0 Q. (a) Demand is more elastic than supply at price po. (b) When a specific tax is introduced the price paid by consumers increases by less than the price received by producers falls. (c) The consumers bear a smaller proportion of the specific tax...
QUESTION 3 The following diagram shows the domestic demand and domestic supply curves in a market. Assu $1 per unit T Price P st . o 0 - D 100 200 300 400 500 Quang Suppose the country imposes a S1 per unit tariff a What is the consumer surplus with the tarift? b. What is the producer surplus vith the tarift? How much tax retenue is generated by the tarif
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