Microeconomics Answers

Fariha's parents increase her allowance, so she spends more money on coffee every week. How can you explain this with a graph?

Arya decides to set aside $300 from her paycheck every month. How will this affect her demand curve? (You may explain without using specific numbers).

Suppose that the quantity of coffee demanded declines from 206,000 gallons per week to 194,000 gallons per week as a consequence of a 10 percent increase in the price of coffee drinks. The price elasticity of demand is a. 1.66. b. 6.00. c. 0.60. d. 1.40. Show the calculation.

What is the effect on the price of an audiotape and the quantity of audiotapes sold if:

a The price of a CD rises?

b The price of a Walkman rises?

c Consumers’ incomes increase?

d Workers who make audiotapes get a pay rise?

e The price of a Walkman rises at the same time as the workers who make audiotapes get a pay rise?

A cake retailer increases the price of its cakes from £2.00 to £2.60 per cake and the quantity demanded decreases from 60 cakes per day to 45 cakes per day.

The price elasticity of demand for the retailer’s cake is:

A​-0.25

B​-0.3

C​-0.83

D​-1.2

Q1.

Draw a diagram showing the effects of an increase in the price of bus journeys on the equilibrium market price and output in the weekly market for e-scooters in the UK. 

Q2.

Referring to your diagram for Q1, fully explain what happens to the equilibrium market price and output of e-scooters.

Q3.

Draw a diagram showing the effects of a decrease in the wage rate of bricklayers on the equilibrium market price and output in the annual market for new houses in France.

Q4.

Referring to your diagram for Q3, fully explain what happens to the equilibrium market price and output of new houses.

"subsidies are inefficient since they lead to a deadweight loss. do you agree? use diagrams to illustrate your answer

rahul purchases only 2 goods: ice cream and chocolates. if own price elasticity (d) of demand for chocolates is 1, what is the cross price elasticity of demand for ice creams? show your calculation/reasoning

if we observe more rice is purchased this year than last year, we may conclude that demand has increased and therefore price must have increased. comment.

you are considering two cable networks for your television. tata sky charges rs. 120 per month regardless of the channels watched. hathway on the other hand charges rs. 1/ channel per month. your monthly channel demand is given by the equation cp 150-50 p, where p is the price per channel. (1) how many channels per month will you watch with each network? (ii) based on consumer surplus obtained, which provider should you choose