Search & Filtering
Suppose the intercept of the demand function increases by two (2), while the slope remains the same. If the supply function remains the same, estimate the new equilibrium price and quantity
c. Demonstrate graphically, the effect of the increase in the intercept of the demand function in (b) above on the equilibrium quantity and price. What generalization can you come up with from the resulting graphical analysis? (7 Marks)
Suppose the absolute values of the intercept and slope of the demand function
are approximated to be ten (10) and three (3) respectively. If the absolute
values of the intercept and slope of the supply function are assessed to be six (6),
and five (5) respectively, calculate equilibrium price and quantity (4
- Suppose the absolute values of the intercept and slope of the demand function
are approximated to be ten (10) and three (3) respectively. If the absolute
values of the intercept and slope of the supply function are assessed to be six (6),
and five (5) respectively, calculate equilibrium price and quantity (4 Marks)
- Suppose the intercept of the demand function increases by two (2), while the
slope remains the same. If the supply function remains the same, estimate the
new equilibrium price and quantity (4 Marks)
- Demonstrate graphically, the effect of the increase in the intercept of the
demand function in (b) above on the equilibrium quantity and price. What
generalization can you come up with from the resulting graphical analysis?
(7 Marks)
The demand for tickets to an Ethiopian Camparada film is given by D(p)= 200,000-
10,000p, where p is the price of tickets.If the price of tickets is 12 birr, calculate price
elasticity of demand for tickets and draw the demand curve?
Suppose the price of Fanta falls from R18 to R14 per bottle, and the quantity demanded rises from 250 to 400 bottles a day.
1.1.1 Calculate the price elasticity of demand using the point elasticity formula.
Draw a diagram illustrating the impact of a tax cut on aggregate spending and explain how a cut innet taxes will affect households and business firms?
Over the years, the market demand for “long-playing records made of polyvinyl has fallen considerably as new technologies replaced the old “LP.” Yet, LPs are still available for sale and they sell at price points higher (in some cases much higher) than CDs. According to economic theory, when demand falls, the price of a product should fall. Explain this apparent contraction between theory and fact.
9. Show that if the marginal product is always decreasing, the average product is always above the marginal product.
With respect to Cobb Douglas preferences more generally, what happens to the demand for each of two products (say, x and y) when the price of one product (say, x) changes as a result of the: (i) substitution effect; and, (ii) income effect?
