Search & Filtering
Use the equations to draw the market demand and supply curves and determine the
equilibrium quantity and equilibrium for milk
Cold Drink and pizza are complements because they are often enjoyed together. When the price of Cold Drink rises, what happens to the supply, demand, quantity supplied, quantity demanded, and the
price in the market for pizza
Suppose that a technological advance in Japan lowers the world price of televisions.
a. Assume the U.S. is an importer of televisions and there are no-trade restrictions. How does technological advance affect the welfare of U.S consumers and U.S producers? What happens to total surplus in the United States?
b. Now suppose the United States has a quota on television imports. How does the Japanese technological advance affect the welfare of U.S consumers, U.S producers, and the holders of import licenses?
The world price of cotton is below the no-trade price in Country A and above the no-trade price in Country B. Using supply-and-demand diagrams and welfare tables such as those in the chapter, show the gains from trade in each country. Compare your results for the two countries.
Suppose the short run production function can be represented by
Q=60,000L^2-1000L^3 then, determine
A) the level labor employement that maximazes the level of output
B) the level of employment that maximazes APL and the maximum APL
suppose that in a year an American worker can produce 100 shirts or 20 computers, while a Chinese worker can produce 100 shirts or 10 computers. a. Graph the production possibilities curve for the two countries. Suppose that without trade the workers in each country spend half their time producing each good. Identify this point in your graph. b. If these countries were open to trade, which country would export shirts? Give a specific numerical example and show it on your graph. Which country would benefit from trade? Explain. c. Explain at what price of computers (in terms of shirts) the two countries might trade. d. Suppose that China catches up with American productivity so that a Chinese worker can produce 100 shirts or 20 computers. What patt predict now?
Quantity Demanded 1200 1100 1000 900 800 700 600 500 400 300 200 100 0
a. Compute each seller’s total cost and average total cost for selling 1 to 6 durians.
b. The price of a durian is now RM11. How many durians are sold in the market?
c. How many durians does each seller sell and how much profit does he earn?
d. How many sellers are there in the market?
e. Is the situation described in above a long-run equilibrium? Explain why?
f. Suppose that in the long run there is free entry and exit. How much profit does each seller earn in the long run equilibrium?
g. What is the market price and number of durians each seller sells? How many durians are sold? How many durians’ sellers are operating in the market?
Each seller in the market has fixed costs of RM9 and the following marginal cost:
Quantity Marginal Cost (MC) (RM)
1 2
2 4
3 6
4 8
5 10
6 12
- Use your knowledge of externality and relevant models to examine the impact of inadequacies of the vaccine on the market outcomes.
- Discuss appropriate government intervention to achieve a socially efficient vaccination volume.
In problem 5, Max’s sister gives him euros20 to spend on his leisure pursuits, so he now has euros55.
a) Draw a graph that shows Max’s consumption possibilities.
b) How many hours does Max choose to windsurf and how many hours does he choose to snorkel now that he has euro55 to spend?
Max enjoys windsurfing and snorkelling. He obtains
the following utility from each of these sports:
Hours Utility from Utility from
per day windsurfing snorkelling
1 120 40
2 220 76
3 300 106
4 360 128
5 400 140
6 412 150
7 422 158
Max has a35 to spend and he can spend as much time
as he likes on his leisure pursuits. Windsurfing equipment rents for a10 an hour, and snorkelling equipment
rents for a5 an hour.
a) Draw a graph that shows Max’s budget line.
b )How long does he spend windsurfing and how long
does he spend snorkelling?
