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For each of the following pairs of good, which good will you expect to have more price elastic demand and why?
1. Textbooks recommended by lecturers or mystery novels.
2. Downloads of tracks by Jay - Z or downloads of hip-hop music in general.
3. Heating oil during the next six months or heating oil during the next five years.
4. Lemonade or water.
You have the following information for your products:
1.The price elasticity of demand is -0.9
2. The income elasticity of demand is 0.5
3. The cross - price elasticity of demand between your good and a related good is 2.0
What can you determine about consumer demand for your product from this information?
The population in country c decreases due to lower birth rate. At the same time there is an increase in the cost of fertilizers, which is used to grow. vegetables. Explain how the market for this vegetables will be affected by this changes. Indicate how equilibrium price and equilibrium quantity will be affected by this changes
The total cost of producing Q units of a given product is given by TC = 500+ 4Q2-12Q. Compute Marginal cost and average cost
There is a conflict between the manager and one of the employees in the procurement department of the company. They are in disagreement on whether the company should make charitable. According to the manager the company should not give money to charity because it does not generate any income
Draw income offer curve and their corresponding Engel curve for the following commodities.
i) Commodity 1 is a perfect substitute for commodity 2 and price of commodity 2 is less than commodity 1.
ii) Commodity 1 is inferior and 2 is normal
The population in country C decreases, due to a lower birth rate. At the same time, there is an increase in the cost of fertilizer, which is used to grow vegetables. Explain how the market for vegetables will be affected by these changes. Clearly indicate how the equilibrium price and equilibrium quantity will be affected by these changes. Make use of a combination of diagrams and verbal explanation to explain your answer. Note that your diagrams should be properly annotated and that marks will be deducted for any missing labels on your diagram.
Due to substantial increases in prices in Country A, the real income level of the population in Country A decreases. Show on a diagram how the decrease in the income level in Country A will affect the demand for meat, which is a normal good. Also indicate how the equilibrium price and equilibrium quantity of meat will change in Country A. The direction of any changes should be clearly indicated using arrows.
Consider a market with freedom of entry and exit of firms. Suppose that all the firms are identical. The market demand curve
2. Suppose the consumer consume good t&S and get the utility 𝑠 1 4 𝑡 3 4 and the consumer spent his total income birr 300 to purchase good t at price = 10 birr &S at price=20 birr per unit. Then based on the above information answer the following questions. A. Calculate the utility maximizing level of consumption of good t&S? (1 point) B. Calculate marginal utility of t at utility maximizing level of consumption of good t&S level and interpret it? (2 points) C. Calculate MRSst at utility maximizing level of consumption of good t&S level and interpret it? (2 points) D. Show the result in graph? (1 point
