Economics Answers

According to mainstream economics, unemployment can exist, even when the labor market is at
equilibrium. How do the economists who are part of neoclassical school explain, the existence of
unemployment, at an instance when labor demanded and labor supplied are equal to each other?

Assume there is an excess supply in the market for teachers. How would the market return to the
equilibrium?

Write a factor that may increase wage level of an occupation.

Starting with 1980’s economists within the neoclassical school have increasingly emphasize the
necessity of having a flexible labor market. One of the characteristics of the flexible labor market is increased level of mobility between sectors and occupations. Write a factor that can increase this kind of mobility within the labor market.

Recently government of Turkey is willing to increase the demand for labor in the country. Write a
policy the government can use for this aim. Explain how according to neoclassical labor market
model, this policy will increase the demand. (Or alternatively, explain in which way neoclassical
model fail to capture the effect of the policy you mention.)

What does the slope of the isoquants represents?

Suppose that Total revenue of the firm is
TR = 5Q + 3Q2 and TC is TC = Q + 4Q2.
Obtain the quantity that maximizes profit and hence maximum profit.
Suppose that Total revenue of the firm is
TR = 5Q + 3Q2 and TC is TC = Q + 4Q2.
Obtain the quantity that maximizes profit and hence maximum profit.

1-Use the model of the foreign exchange market to explain the relatively high value of the Australian dollar
2- Describe the adjustment to long run equilibrium if an economy experiences a
negative aggregate demand shock and the short run equilibrium output is below
potential output.

An economic analyst employed by Agbesco Ltd observed that, 9.5 units of ‘Kalami’, Agbesco Ltd product was purchased by customers of Agbesco regardless of the price charged for the product. In addition,when Agbesco Ltd increased its price by GH1, quantity demanded of Kalami falls by 80%.
On the other hand,Agbesco Ltd supplied 80 units of Kalami irrespective of the price level. Interestingly, when Agbesco Ltd increased its price by GH1, quantity supplied of Kalami increased by 20%.
Write out an equation for the demand curve and supply curve for the company. Find the equilibrium price and quantity.
Sketch the demand and supply curves using their respective equation.
Calculate the price elasticity of demand and supply and interpret the results.
Calculate the producer, consumer and total surplus.

4. Suppose, the price of commodity A is $80 and that of commodity B is $100.
(a) If the consumer has an income of $1200, form the consumer budget line equation.
(b) If the consumer income increases from $1200 to $2000. On the same graph draw the budget line in (i) and (ii) and show the direction of change.
(c) Repeat the exercise in (ii) when the consumer income falls from $120 to 105