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What will happen if ICs were concave to the origin?will equilibrium be stable and why?
Calculate the price elasticity of demand if the price changed from $13 to $12 and from $2 to $1
How are the diminishing marginal utility and negatively sloped demand curve related ?
Define and illustrate the concept of Price Elasticity of Demand (PED) and explain the reason why different methods are used in order to measure it.
Explain what a prisoner’s dilemma is and relate your explanation to the situation that the members of an oligopoly may face.
Food prices often rise or fall with good or bad harvests or because of a change in demand. A
recent example is the price of Brazil nuts, which by May this year had risen over 60% on
European markets. Part of the reason for the price rise has been on the demand side.
Consumption of Brazil nuts has increased as more people switch to healthier diets. This includes
the purchase of the nuts themselves and as part of healthier snack foods. With supply being
relatively inelastic, any rise in demand tends to have a relatively large effect on price. A more
acute reason is on the supply side. There has been a very poor harvest of Brazil nuts. The nuts
are grown largely in the Amazon basin which has been hit by drought linked to the El Nino
effect. This, however, is only a temporary effect and future harvests should increase again as
rainfall returns to normal. However, in the longer term, rainfall patterns may change with the
effects of global warming.
commercial activities do not add any value to goods and therefore are unproductive.discuss
1. For each of the following pairs of goods, which good would you expect to have more elastic demand and why? a. required textbooks or mystery novels b. Beethoven recordings or classical music recordings in general c. heating oil during the next six months or heating oil during the next five years d. root beer or water
Suppose that initially equilibrium income was 200 units and that was also the full-employment level of income. Assume that the consumption function is C=25 + 0.8YD
And that,from this initial equilibrium level, we now have a decline in investment of 8 units. What will be the new equilibrium level of income? What increase in government spending would be required to restore income to the initial level of 200 Alternatively, what reduction in tax collections would be sufficient to restore an income level of 200?
P = 50-0.1Q, P=20$
Please kindly explain about this exercise.
