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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?
Consider an economy that produces and consumes Bread and Automobile. Data for two different years 2005 and 2010 is given in the following table.
Year. 2005. 2010
Price of Automobiles. 5000$. 6000$
Price of a loaf of
Bread. 10$. 20$
Number of Automobiles
Produced 100$. 120$
Number of loaves
Of bread produced. 500000$. 400000$
* Using the year 2005 as a base year ,
a. Calculate the nominal and real GDP of
2010
b. Find the value of GDP Deflator for the
year 2010 and interpret your result.
c. Calculate the inflation rate in 2010.
Suppose that the firm operates in a perfect compitative market. The market price of his product is 4. The firm estimate its cost production with the following cost gunction
Tc=50+20q-5q2+p.33q3
What is level of output should be the firm produce to maximize its profit
The Department of Agriculture of Economica (DAE) administers the floor price of milk at $4 per pound of milk. To support the price of milk at the price floor, the DAE had to buy up the surplus.
Q = 120 – 20P (Market demand)
Q = 20P (Market supply)
ii) Explain floor price and the purpose for the government to implement the policy.
iii) Use the equations to determine the quantity demanded and quantity supplied of milk at
the floor price. Explain the market outcomes of the floor price.
iv) Calculate the consumer surplus and producer surplus in the absence of a price floor.
v) Calculate the consumer surplus and producer surplus with the price floor at $4 per pound of milk.
vi) Use the results in parts (iv) and (v) to explain the impact of floor on the economic welfare of consumers and producers.
vii) Calculate the deadweight loss of floor price policy and explain the result.
viii) How much money does the DAE spend on buying up surplus milk?
What is price elasticity of demand? Do you expect the price elasticity of demand for the following goods to be elastic or inelastic? Elaborate your answer.
Beef and Chicken
Haircare products available in the market.
Apple Inc. products.
Insulin for diabetes patients.
Use of electricity.
Question
A firm has the following information on production and costs from past data:
Output (Y) 0 6 12 18
Total Cost (TC) 9 2775 5361 8199
If the total cost function is known to be TC=aY3+bY2+kY+f, and the demand for the product of the firm is Y=320-(1/2)P. answer the following:
Determine the coefficient of the cubic cost function.
Derive all cost and revenue curves and the profit function.
Show that the MC cuts the AVC when AVC is at its minimum point. Plot the relevant graph indicating all points.
Q=60,000L square -1000L 3
Consider the following policies, each of which aimed at reducing violent crime by reducing the use of guns. Illustrate each of these proposed policies in a supply-and-demand diagram of the gun market.
a)a tax on gun buyers
b)a tax on gun sellers
c) a price floor on guns
d) a tax on ammunition
A firm has found a way of using first-degree price discrimination. Demand for its product is given by
P = 20 – 2Q
Marginal cost is constant and equal to $6.
i) With first-degree discrimination, what will be the profit-maximizing rate of output? How much economic profit will the firm earn?
ii) What will be the profit-maximizing rate of output if the firm does not discriminate and sets one price for all customers? How much economic profit will the firm earn in this case?
A firm has the following revenue and cost functions.
Determine the quantity level at which the firm maximizes its total profit.
(Hint: use marginal revenue = marginal cost rule) (
