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Given the following demand and supply equations for tables:
Demand: Qd = 15 - 2P (where "P" is the price per chair; Q is the quantity)
Supply: Qs = 8 + 3P
a) Do the supply and demand equations satisfy the "laws of supply and demand"? Explain [2 points]
b) Determine the equilibrium price and quantity. Show calculations. [3 points]
c) Calculate and indicate on the graph the consumer surplus and producer surplus. [6 points]
c) Assume that demand decreases by 5 (units). Determine the revised demand equation. In addition, determine the new equilibrium price and quantity. Show your work. [4 points]
What is economics
Suppose that the demand curve for garbanzo beans
is given by
Q ¼ 20 - P. where Q is thousands of pounds of beans bought per
week and P is the price in dollars per pound.
a. How many beans will be bought at P ¼ 0?
b. At what price does the quantity demanded of
beans become 0?
c. Calculate total expenditures (P Æ Q) for beans
of each whole dollar price between the prices
identified in part a and part b.
d. What price for beans yields the highest total
expenditures?
e. Suppose the demand for beans shifted to
Q ¼ 40 -2P. How would your answers to
part a through part d change? Explain the differences intuitively and with a graph
3.
The manager of a Cape Town superette carries a stock of Jive soft drinks. The country experiences an economic recession which yields an anticipated consumer income decrease of 6 %. As a result, the income elasticity of demand for this product is estimated to be –2.5.
(a) Calculate the percentage change in the quantity of your soft drink orders required to accommodate the new demand without a surplus or shortage of inventory.
(b) What does the elasticity coefficient of –2.5 reveal?
2
Surgex Ltd produces surgical masks and its market is characterised by the following equations
𝑸 = 15 − 0.2P ; 𝑸s = −𝟏 + 0. 6P
(a) Using a diagram, draw the demand and supply curve. [show all workings]
(b) Calculate the equilibrium price and quantity
(c) Calculate the consumer surplus
1.
In South Africa, entrepreneur Hloki Raphuting, founder of PalmH, manufactures high-quality bags and shoes all made from the finest leather. Draw a PPC illustrating the production combinations of leather bags and leather shoes. On the same diagram illustrate and explain what would happen to the PPC if PalmH acquired additional resources for producing both shoes and bags.
If demand (Qd)=100 -14p; and supply (Qs)= 50+6p; then at what price will there be a surplus of 60 units?
If Alexi devoted half of his time (5 out of 10 hours) to making street tacos and half of his time to making Cuban sandwiches, how many of each would he produce in a week? If Tony did the same, how many of each would he produce? How many street tacos and Cuban sandwiches would be produced in total?
In the short run, K os fixed at 16000 hours. What is the short run demand for labor?
In the short run K is fixed at 16,000 hours. What is the short run demand for labor?
