Economics Answers

3) Supply and demand for a competitive labor market for professional hockey players is described by the following equations, where quantity is measured in hundreds:


P = 120 – 2Qd

P = 20 + 3Qs


Draw a graph of this labor market and calculate, and show, the equilibrium salary and quantity of players.

Assume there are 30 teams in a league. What is the effect of roster size per team being limited to 60? What is the effect of roster size per team being limited to 70?

Calculate the change in total surplus if roster size is changed from 60 to 50? As a whole, under which roster size limit are players better off?

Given a nominnal interest rate of 6 percent in which of the following casses would you earn the lowest after tax real interest rate

Why is the Red line at R4 below equilibrium and at R12 above equilibrium , and also why is Equilibrium at R7 with 8hours of labour.

And what is the walfare effect of this new legislation?

If the rise in the price of a bento box from $3 to $5 results in a rise in the demand for “Wakami” from 700 to 800 units, calculate the cross elasticity of demand between the two goods. State the relationship between both goods.

What is income and subsituation effect

Explain briefly reasons that causes the world Economic Crisis in 2008.

Suppose that the economy is characterised by the following behavioural equations: C=C0+c1Yd where C0=280
I=270
G=300
T=200
Marginal Propensity to Save (MPS) is 0,4 or 40% solve for:
a) equlibrium GDP(Y)
b) disposal income (Yd)
c) consumption spending(C)

According to the department of labour's new rates, domestic workers working in bigger metropolitan areas who work more than 27 ordinary hours per week, must be paid a minimum of R13, 69 per hour. Workers who work fewer than 27hours per week, must be paid a minimum of R16,03 per hour. This will mean that a domestic worker who works 45 hours per week will now earn a minimum of R2669, 24 a month. With the aid of a diagram, discuss the welfare effect of this new legislation if the minimum wage is below the equilibrium wage and above the equilibrium wage rate with labour hours as your quantity variable.

Suppose the own price elasticity of demand for good X is -3, its income elasticity is -2, its advertising elasticity is 3, and the cross-price elasticity of demand between it and good Y is -5. Determine how much the consumption of this good will change if:
a. The price of good X decreases by 7 percent.

b. The price of good Y increases by 8 percent.

c. Advertising decreases by 4 percent.

d. Income increases by 3 percent.

Suppose the own price elasticity of demand for good X is -3, its income elasticity is -2, its advertising elasticity is 3, and the cross-price elasticity of demand between it and good Y is -5. Determine how much the consumption of this good will change if:
a. The price of good X decreases by 7 percent.

b. The price of good Y increases by 8 percent.

c. Advertising decreases by 4 percent.

d. Income increases by 3 percent.