Describe two of the crucial assumptions made in the model of supply and demand, as discussed...
Describe two of the crucial assumptions made in the model of supply and demand, as discussed in your reader. What is your view of the supply and demand model, having worked with it for a few weeks?
Homework Answers
Ans) The four key assumptions made in supply and demand model are÷
- Market is homogeneous.
- Both supply and demand are for same and single market.
- Every unit is sold at same price and everyone has same amount of information.
- There are large number of consumers and sellers.
Demand and supply model is the basic concept in economics. It helps us understand the relationship between price and quantity supplied and quantity demanded.
Further this model serves as a simplistic view of real market and how consumers and sellers behave in a market. It also tells how equilibrium price is reached, which helps determine the allocation of resources.
Add Answer to:
Describe two of the crucial assumptions made in the model of
supply and demand, as discussed...
2. Consider the model of intra-industry trade with monopolistic competition that woe discussed in the class. (a) Mention and briefly describe the assumptions of the model. (6) (b) Draw a figure d...
2. Consider the model of intra-industry trade with monopolistic competition that woe discussed in the class. (a) Mention and briefly describe the assumptions of the model. (6) (b) Draw a figure depicting the long-run equilibrium with trade. (4)
2. Consider the model of intra-industry trade with monopolistic competition that woe discussed in the class. (a) Mention and briefly describe the assumptions of the model. (6) (b) Draw a figure depicting the long-run equilibrium with trade. (4)
Recall the credit market model we discussed in class. Using a supply-demand analysis, show what happens...
Recall the credit market model we discussed in class. Using a supply-demand analysis, show what happens to investment, savings and the interest rate when firms suddenly become more pessimistic about their future invest projects.
The neoclassical model of labour supply is based on a number of assumptions. List and discuss any five assumptions that...
The neoclassical model of labour supply is based on a number of assumptions. List and discuss any five assumptions that you think are most unrealistic for modelling the labour supply decisions made by workers in a developing country such as South Africa.
Describe the Neoclassical model of aggregate demand and aggregate supply. Describe the policy imp...
Describe the Neoclassical model of aggregate demand and aggregate supply. Describe the policy implications of the Neoclassical perspective. Describe the interrelationship between the Neoclassical and Keynesian economic models. In 2009, American Recovery and Reinvestment Act provided for roughly $800 billion in government spending (most of it) and tax cuts (less) to jumpstart the economy. Do you think this was the correct approach? Cite three reasons why or why not. Would your opinion change if you were in the auto industry...
9. The following simple model is intended to represent the dynamics of supply and demand. Let...
9. The following simple model is intended to represent the dynamics of supply and demand. Let P denote the selling price of a certain product and Q the quantity of this product being produced. The supply curve Q = f(P) tells how much should be produced at a given price to maximize profit. The demand curve P = g(Q) tells what price buyers should pay given a certain level of production in order to maximize their utility. (a) Select a...
QUESTION TWO It is commonly accepted that a crucial factor in the financial decisions of a...
QUESTION TWO It is commonly accepted that a crucial factor in the financial decisions of a company, including the evaluation of capital investment proposals, is the cost of capital. Required: (a) Explain in simple terms what is meant by the 'cost of equity capital for a particular company (5 marks) (b) Calculate the cost of equity capital for Genesis PLC from the data given below, using two alternative methods, i.e. (i) A dividend growth model (ii) The Capital Asset Pricing...
QUESTION in this lesson we discussed two major approaches to fiscal policy demand-side and supply-side economics...
QUESTION in this lesson we discussed two major approaches to fiscal policy demand-side and supply-side economics Let's see how well you understand the concepts behind these Your task for each of these govenment actions, identity whether this is a supply-side or demand-side approach to the economy Supply-side B Demand-side compensation Tax rebate to producers on new factories Temporary Assistance for Needy Familes(TAN Property tax abatement for a corporate production facility Capital gains tax reductions Food stamps
What are the crucial assumptions that underlie the Two-Fund separation result upon which the CAPM is...
What are the crucial assumptions that underlie the Two-Fund separation result upon which the CAPM is based? (Note: Two-Fund separation is the result that all investors find it optimal to form portfolios containing only the market portfolio and the risk- free asset). Give some indications of how Two-Fund separation would break down if the assumptions were violated.
If any of the assumptions of perfect competition are violated, Select one: a. supply-and-demand analysis cannot...
If any of the assumptions of perfect competition are violated, Select one: a. supply-and-demand analysis cannot be used to study the industry. b.graphs with flat demand curves cannot be used to study the firm. c.graphs with downward-sloping demand curves cannot be used to study the firm. d. there may still be enough competition in the industry to make the model of perfect competition usable. e. one must use the monopoly model instead.
Draw and carefully describe a graph that utilizes theAggregate Demand/Aggregate Supply model that would illustrate...
Draw and carefully describe a graph that utilizes the
Aggregate Demand/Aggregate Supply model that would illustrate the
current state of the aggregate economy in the United States. The
Aggregate Demand/Aggregate Supply Model is first explained in
Chapter 11of your text. Carefully explain your graph.You should draw your own AD/AS graph which you can then scan
and paste into your post. Your graph needs to be clearly labeled
and explained carefully. Make sure that your graph includes an
aggregate demand (AD)...
2. Consider the model of intra-industry trade with monopolistic competition that woe discussed in the class. (a) Mention and briefly describe the assumptions of the model. (6) (b) Draw a figure depicting the long-run equilibrium with trade. (4)
2. Consider the model of intra-industry trade with monopolistic competition that woe discussed in the class. (a) Mention and briefly describe the assumptions of the model. (6) (b) Draw a figure depicting the long-run equilibrium with trade. (4)
QUESTION TWO It is commonly accepted that a crucial factor in the financial decisions of a company, including the evaluation of capital investment proposals, is the cost of capital. Required: (a) Explain in simple terms what is meant by the 'cost of equity capital for a particular company (5 marks) (b) Calculate the cost of equity capital for Genesis PLC from the data given below, using two alternative methods, i.e. (i) A dividend growth model (ii) The Capital Asset Pricing...
QUESTION in this lesson we discussed two major approaches to fiscal policy demand-side and supply-side economics Let's see how well you understand the concepts behind these Your task for each of these govenment actions, identity whether this is a supply-side or demand-side approach to the economy Supply-side B Demand-side compensation Tax rebate to producers on new factories Temporary Assistance for Needy Familes(TAN Property tax abatement for a corporate production facility Capital gains tax reductions Food stamps
What are the crucial assumptions that underlie the Two-Fund separation result upon which the CAPM is based? (Note: Two-Fund separation is the result that all investors find it optimal to form portfolios containing only the market portfolio and the risk- free asset). Give some indications of how Two-Fund separation would break down if the assumptions were violated.
If any of the assumptions of perfect competition are violated, Select one: a. supply-and-demand analysis cannot be used to study the industry. b.graphs with flat demand curves cannot be used to study the firm. c.graphs with downward-sloping demand curves cannot be used to study the firm. d. there may still be enough competition in the industry to make the model of perfect competition usable. e. one must use the monopoly model instead.
Draw and carefully describe a graph that utilizes the
Aggregate Demand/Aggregate Supply model that would illustrate the
current state of the aggregate economy in the United States. The
Aggregate Demand/Aggregate Supply Model is first explained in
Chapter 11of your text. Carefully explain your graph.You should draw your own AD/AS graph which you can then scan
and paste into your post. Your graph needs to be clearly labeled
and explained carefully. Make sure that your graph includes an
aggregate demand (AD)...
Most questions answered within 3 hours.
-
Buses are powered by chemical reactions. Define matter and the
four states of matter. What is...
asked 13 minutes ago -
Use conservation of energy to find the velocity of a free point
charge q1 at 22cm...
asked 20 minutes ago -
First, describe policies promoted by governments of the
political right to address economic globalization. Second, describe...
asked 37 minutes ago -
M2-9 Completing T-Accounts LO2-4
Following are the transactions of Dennen, Inc., for the month of
January....
asked 37 minutes ago -
Write a program using python that reads from values from a text
file and plots them...
asked 39 minutes ago -
Look up the density of
the metal of the object used in parts A and B...
asked 38 minutes ago -
Discuss strategic considerations that Amazon and NYC politicians
had. Analyze why the deal between Amazon and...
asked 41 minutes ago -
A combustion reaction is describes as a carbon source reacting
with oxygen and producing carbon dioxide...
asked 56 minutes ago -
Buckminsterfullerence is a recently allotrope of carbon in which
carbon atoms form molecules of formula C_60,...
asked 58 minutes ago -
Lower Equitorial and Upper Equitorial are the same except Lower
Equitorial has a larger capital stock....
asked 1 hour ago -
how do you think that pH of a jar where you have added a certain
amount...
asked 1 hour ago -
If the Federal Reserve increases the reserve requirement, what
will happen to the Money Supply in...
asked 1 hour ago