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When differentiating the law of demand and law of supply , besides explaining the price increase and Qd decrease and vice versa, can I include substitute effect and law of diminishing for the law of demand in my explanation? does it consider a difference?
Suppose Germany and France each produce only two goods, guns and butter. Both are produced using labor alone. Assuming both countries are at full employment, you are given the following information: Germany: 10 units of labor required to produce 1 gun 5 units of labor required to produce 1 pound of butter Total labor force: 1,000,000 units France: 15 units of labor required to produce 1 gun 10 units of labor required to produce 1 pound of butter Total labor force: 750,000 units . a) if transportation cost are ignored and trade is allowed, will france and germany engage in trade? explainb) if a trade agreement were negotiated, at what rate number of guns per unit of butter would they agree to exchange.
Suppose Germany and France each produce only two goods, guns and butter. Both are produced using labor alone. Assuming both countries are at full employment, you are given the following information: Germany: 10 units of labor required to produce 1 gun 5 units of labor required to produce 1 pound of butter Total labor force: 1,000,000 units France: 15 units of labor required to produce 1 gun 10 units of labor required to produce 1 pound of butter Total labor force: 750,000 units a. Draw the production possibility frontiers for each country in the absence of trade.
How will the global hand sanitizer market get affected in the short- and long-term by the COVID-19 pandemic?
13. For a firm in a perfectly competitive market, the price of the good is always
a. equal to marginal revenue.
b. equal to total revenue.
c. greater than average revenue.
d. All of the above are correct.
14. If a firm in a perfectly competitive market triples the number of units of output sold, then total revenue
will
a. more than triple.
b. less than triple.
c. exactly triple.
d. All of the above are potentially true.
15. Because the goods offered for sale in a competitive market are largely the same,
a. there will be few sellers in the market.
b. there will be few buyers in the market.
c. buyers will have market power.
d. sellers will have little reason to charge less than the going market price.
16. Which of the following is NOT a characteristic of a monopoly market?
a. Firms are price takers.
b. Firms have difficulty entering the market.
c. There are many buyers in the market.
d. Goods offered for sale are not the same.
The government decides to protect supplies and introduce a unit subsidy for the good or commodity produced by that supplier.
1. Using a diagram, carefully explain the consequences of the action on the equilibrium price and quantity in the market for this goods.
2. Discuss the pro and cons of such policy
Using illustrations provide an explanation on how the market adjusts to the market equilibrium when the price in the market is not originally set at the market equilibrium price.
If the demand curve of a profit maximizing monopolist is given as Q = 40 − 0.2P and cost function as C = 30 + 30Q, find equilibrium output level, monopolist price, and profit
- If the inverse demand curve of profit maximizing monopolist is given as P =1200 − 2Q , and cost function as
C = Q3 − 61.25Q2+1528.5Q + 2000, find equilibrium output level, monopolist price, and profit.
1. Suppose that there are 250 identical individual consumers in the market for commodity X, each with a demand function given by dx = 6-Px and 50 identical producers of commodity X, each with a supply function given by sx =5Px. (8 Marks)
a) Derive the market demand function and the market supply function for commodity X.
b) Compute the market equilibrium price and equilibrium quantity mathematically.
c) Tabulate the market demand schedule and the market supply schedule for commodity X.
d) show whether surplus or shortage occurs at
i) P = 2
ii) P = 5
