Economics of Enterprise Answers

What is the one question that the Congressional Budget Office (CBO) is required to ask and then answer regarding legislation?

a) Yesterday, the price of a packet of sachet water was ȼ3.00, and Sompa was willing to buy 10 packets. Today, the price has gone up to ȼ3.75 a packet, and Sompa is now willing to buy 8 packets. Is Sompa's demand for sachet water elastic or inelastic? What is her point elasticity of demand at the original price? What is the mid-point elasticity of demand?

Give an outline of the differentiating characteristics of a monopoly and a oligopoly market structure

discuss the profit maximizing position of a perfectly competitive firm in both the short run and long run

with the aid of diagrams explain the relationship between price elasticity of demand and total revenue

The California State University System has raised its fees by 10%. Would the demand for these universities (such as San Diego State University or CSU – San Marcos) be relative elastic or inelastic? Use the three factors to explain why.

The state of West Dakota currently has per capita income of $35,500, average annual temperature of 43.0 degrees, median age of 37.5 years, and 48.0% (or 0.48) of the population in a metro area. The state suddenly experiences an improvement in its economy, and increases its per capita income to $38,600. This improvement will likely be associated with the burglary rate changing from about 519 annual burgles to about ___ annual burgles (round your answer to the nearest whole number, no decimals).

Marginal propensity to consume (MPC) = 0.25, Investment (I) = 5500, Government
Spending (G) = 1200, Autonomous consumption (α) = 1500,
Net Exports (X-M) = 2,600
Y= C+ I + G + X-M
C= α + βY
Required;-
i) Calculate the equilibrium level of National Income. (3 marks)
ii) Calculate the equilibrium consumption and savings (4 marks)
iii) Compute a simple investment multiplier and interpret it

Identify five determinants of price elasticity of demand with each determinant explain how it increases or decreases elasticity

Economists often use a ___________ to make decisions about economic matters.