Answer to Question #288283 in Microeconomics for Borgay

Question

1. Beef supplies are sharply reduced because of drought in the beef-raising states, and consumers turn to pork as substitute beef. Explain with illustrations, the changes in the beef and pork markets

Question 2 Explain the concept of production possibilities frontier (ppf) b. There are seven workers in an Economy. Each worker can make either six tins of milk or

five shirts. Output per worker is independent of the number of workers in the same industry.

i) Draw Draw up a table showing the allocation and various combinations of output available

to this economy.

ii How many tins of milk can this economy produce, if it is willing to forgo shirt? Explain your answer

iii Explain any three ways that this economy can expand its PPF.

Question 3

a. Explain the term price ceiling.

b. Give three effect of price ceiling

c. Given the following demand and price function of milk in the market. Qd -28-4p and Qs = 18 + P respectively.

i. Determine the equilibrium price and quantity of milk

Answer 1

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