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The demand for a product is unit elastic. At a price of $20, 10 units of a product are sold. What would one expect sales to equal if the price is increased to $40? Be sure to provide an explanation
What is the likelihood that firms would
enter the market in the short-run? Use Covid 19 as a market condition to explain the likelihood and further explain an exit strategy if one exists.
Increase in minimum wage law how this effect would this increase have on unemployment does the change in unemployment depend on the elasticity of demand supply or both the elasticity is or neither
Suppose you are a first year university student.
a. In what ways is your standard of living different from that of your (i) parents
and (ii) grandparents when they were your age?
b. Why have these changes occurred?
Imagine a society that produces military goods and consumer goods, which we will
call “guns” and “butter.”
a. Draw a production possibilities frontier for guns and butter. Using the concept
of opportunity cost, explain why it most likely has a bowed-out shape.
b. Show a point that is impossible for the economy to achieve.
c. Show a point that is feasible but inefficient.
d. Imagine that the society has two political parties, called the Hawks (who want
a strong military) and the Doves (who want a smaller military). Show a point
on your production possibilities frontier that the Hawks might choose and a
point that the Doves might choose.
e. Imagine that an aggressive neighboring country reduces the size of its military.
As a result, both the Hawks and the Doves reduce their desired production of
guns by the same amount. Which party would get the bigger “peace dividend,”
measured by the increase in butter production? Explain.
Draw a consumer budget constraint and indifference curves for Pepsi and Pizza. Find out the optimal consumption choice when consumer has income of $2000 and the price of Pepsi is $5 per bottle and the price of per pizza is $10.What is the marginal rate of substitution at this optimum?
What is the impact on equilibrium price and quantity in the market
if the cost of producing them increases
Lisa Eriksson is a sole trader and runs a shop selling porcelain garden pots. When she started three years ago, she bought SEK 400,000 worth of inventory. She expects to use the inventory for a total of 8 years. The rent for the premises is SEK 7000 per month and the operating costs for electricity, offices, etc. are about SEK 3000 per month. This year she expects to have a purchase of goods of 800 000 SEK. She values the stock at the beginning of the year at SEK 100 000 and at the end of the year the stock could be worth SEK 200 000. The year's interest costs amount to SEK 20 000. She estimates other costs at SEK 80 000. Sales for the year are estimated at SEK 1 800 000.
a) What will be the result for the year?
b) What will the result be enough for?
Maria makes and sells exclusive scented candles. Each scented candle uses half a litre of stearin. The stearin costs SEK 100 per litre and the fragrance costs SEK 10 per candle. She then sells the candles for SEK 200 each, excluding VAT. Maria pays SEK 30,000 a month for rent and other costs.
a) Calculate the result if Maria makes and sells 4 600 candles a year.
b) Calculate the break-even point for Maria's candle production.
c) The company's current volume is 4 600 candles, calculate the margin of safety.
d) How many candles does Maria have to produce and sell in order to make a profit of SEK 300 000 per year?
Find a recent article in a newspaper or magazine illustrating a change in price or
quantity or equilibrium in some market. Analyze the situation using economic
reasoning.
a) Has there been an increase or decrease in demand? Factors that could shift the
demand curve include changes in preferences, changes in income, changes in the
price of substitutes or complements, or changes in the number of consumers.
b) Has there been an increase or decrease in supply? Factors that could shift the
supply curve include changes in costs of materials, wages, or other inputs;
changes in technology; or changes in the number of firms in the market.
c) Draw a supply-and-demand graph to explain the change identified. Be sure to
label your graph and clearly indicate which curve shifts.
