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A person's salary increases from E5000 a month to E7000 a month. As a result of this change in salary his consumption of good X decreases from 20 units per month to 15 units per month while the consumption of good Y increases from 15 units per month to 20 units per month. Give the appropriate comment?
4. a. Name a product that has a price that adjusted very frequently in the last year. Explain why.
b. What is the difference between monopolistic competition and oligopoly? Explain with local examples.
relationship between three stages of short-run production and production elasticity
If Maria estefan disposable IncomeIncreaseFrom 600 to 650
And her level of personal consumption expenditures increase from 450 to 520 You may conclude that’s her marginal propensity to
2. What will happen to the equilibrium price and quantity of butter in each of the following cases? You should state whether demand or supply or both have shifted and in which direction using the appropriate diagrams:
a) A rise in the price of margarine
b) A rise in the price of bread
c) A rise in the demand for bread
d) An expected increase in the price of butter in the near future
e) A tax on butter production
Suppose we observe that the equilibrium price of a particular good has decreased significantly over the past 5 years, with virtually no change in the equilibrium quantity. Which of the following is the most likely explanation? Over the past 5 years:
A. both supply and demand have decreased.
B. supply has increased but demand has decreased
C. both supply and demand have increased
D. demand has increased but supply has decreased.
Suppose we observe that the equilibrium price of a particular good has decreased significantly over the past 5 years, with virtually no change in the equilibrium quantity. Which of the following is the most likely explanation? Over the past 5 years:
A. both supply and demand have decreased.
B. supply has increased but demand has decreased
C. both supply and demand have increased
D. demand has increased but supply has decreased.
Suppose that equilibrium price in this market were to remain at P2 while equilibrium quantity increases from Q2 to Q4. Which of the following could account for such a change?
1.an increase in income, assuming this is a normal good.
2.an increase in the price of a complement combined with an increase in the price of a factor of production.
3.an increase in the price of a substitute combined with a technological innovation reducing production costs.
4.an increase in the price of a complement combined with a decrease in the price of a factor of production
Suppose that equilibrium quantity in a market were to remain at Q2 while equilibrium price increases from P2 to P1. Which of the following could account for such a change?
1.an increase in the price of a substitute combined with a technological innovation reducing production costs.
2.a decrease in the price of a substitute combined with a technological innovation reducing production costs.
3.an increase in the price of a complement combined with a decrease in the price of a factor of production.
4.a decrease in the price of a complement combined with an increase in the price of a factor of production.
Celia is a potato peeler for CanCan Foods. She decides to quit her job and instead work as a seamstress at CoverUp Clothing. This would cause:
1.a movement along the production possibilities curve.
2.a movement towards a point that is outside the PPC
3.an outward shift of the production possibilities curve.
4.an inward shift of the production possibilities curve.
