Economics of Enterprise Answers

Suppose that the price of basketball tickets at your college is determined by market forces. Currently, the demand and supply schedules are as follows:

Question 2: Consider the following sequence of events in the United States market for strawberries during the years 2010-2013:

➢ 2010: uneventful. The market price was $5.00 per bushel, and 4 million bushels were sold.
➢ 2011: There was a scare over the possibility of contaminated strawberries from the US state of Michigan. The market price was $4.50 per bushel, and 2.5 million bushels were sold.
➢ 2013: By the beginning of the year, the scare over contaminated strawberries ended when the media revealed that the initial reports about the contamination were a hoax. Hence, demand rebounded to its pre-scare levels. A series of floods, however, destroyed significant portions of the strawberry fields in other US states, including Iowa, Illinois and Missouri. The market price was $8.00 per bushel and 3.5 million bushels were sold.

Answer the following questions:

Hint: Keep in mind for the following that (1) if we are given no information about shortages or surpluses, we take observed price and quantity to be equilibrium price and quantity; (2) you must be careful shift the appropriate curve – demand or supply.

a. [7 marks] Draw a diagram depicting the US demand and supply of strawberries in 2010. Explain your diagram, labelling the axes and justifying the shape of your demand and supply functions. Sketch the equilibrium price and output levels on your graph and explain why this must be where market demand and supply are equal.

























b. [8 marks] What other determinants other than price might affect market demand and supply? Hence, depict and explain the price and output movements in this market from 2010 to 2011.





























c. [5 marks] Depict and explain the price and output movements from 2011 to 2013.



























d. [5 marks] Assume that (inverse) demand and supply curves are linear, of the form P = A-BQ and P = C+DQ, where Q is market quantity and P is market price. Also, assume that all the shifts in demand and supply from 2010-2013 are parallel shifts (i.e., slope remains constant in a “parallel shift”). Hence, using the shifts from 2010-2011, calculate the slope of the supply function in this market. Using the shifts from 2011-2013, calculate the slope of the demand function in this market.




















e. [5 marks] Using your answer to (d) and the equilibrium price and output figures you have been given in 2010, calculate numerical values for the constants A and C in the equations of (inverse) demand and supply.


















f. [5 marks] Using your answer to (e), predict the effect on equilibrium price and quantity of a 1 unit upwards shift in demand (i.e., an increase of 1 in the constant “A”).

The following are the demand and supply equations of market for fish.& & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & & p=600-3q^d& & & & & & & & & & & & & & p= -50 - 2q^s& (i) Determine the equilibrium price and quantity that would prevail in this market.& & & & (ii) Develop the excess demand equation of this market.& & & & (05 marks)& (iii) If government decides to establish a maximum price of Rs. 180 in this market, using your& excess demand equation determine the excess demand/supply in this market.& & & (iv) What machinery that you would propose the government to stabilize the above& maximum price in this market.& & & & & & & & & & (v) Who would be benefitted of this decision of the government?&

What would do you expect to happen in Sri Lanka’s production possibility space if Sri Lankan& government agrees to practice good governance and the private sector decides to implement& good corporate governance policies?

Describe the effect of frequent trade union actions to stop work on its position in the& production possibility space.

What can you expect to take place in its production possibility space if this economy employs& advanced technology in its production processes? Argue

Well, my questions are related to taxation? i would appreciate if u can ans me, i have 3 questions. I have to use these ans as a part of my assignment.

1)How is the unemployment tax collected?
2) How does the govt. ensure that there is compliance related to unemployment tax?
3) Is the tax sufficient, convenient, efficient and fair?

plz ans me soon as possible, i would be highly thankful to you...

To pay using borrowed money is what?

Process costing is used when
a) The production process is continuous
b) Dissimilar products are involved
c) Cost are to be assigned to specific jobs
d) Production is aimed at filling a specific customer order