Economics Answers

According to economists, If the price of energy (oll and gas, increases, then the price or certain goods anc

services can also increase. Use the Model of Demand and Supply (diagram) to explain why this might be

the case. You can discuss using the example or any product

Suppose government purchases increase to 1000, what is the new equilibrium income and consumption? (4 Marks)

v. What is the new fiscal deficit/surplus after government spending increases to 1000?

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.

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.

firm has the production function: TC=120-0.1Q^2 , and sells its output in two separate markets with demand functions: Q1=800-2p1

Q2=750-2.5p2

;

(i) Find the profit-maximizing output and sales in each market [8 marks]

(ii) Use the Hessian matrix to check if the second-order conditions for a maximum a

) A firm has the production function: , and sells its output in two separate markets with demand functions:

;

(i) Find the profit-maximizing output and sales in each market [8 marks]

(ii) Use the Hessian matrix to check if the second-order conditions for a maximum are met.

). In today’s economy, it’s harder for workers to get promoted. In 2006, it took an average

of 2 ½ years to get a promotion; today it takes 4 ½ years. As a result, fewer workers are willing

to boost their productivity in an effort to impress the boss and get the promotion. In 2006, 25

percent of employees said they were willing to give “an extra oomph” at work (boost their

productivity); today about 15 percent are willing to do so. Explain the connection to the Phillips

curve.

1. Apple Corporation requires its top managers to own shares of stock in Apple equal in value to three times their annual salary. Explain what problem Apple is trying to solve with this requirement, and explain whether this requirement does indeed solve the problem.

Give an example of any factor that influences the size of multiplier

Compare the perfectly competitive firm and monopolist as to how it makes the following decisions. Hint: use either equations or graphs to illustrate your answer

I. How much to produce

Ii. What to produce

III. Whether or not to shut down in the short run

Iv. What happens in the long run if losses persist