Economics Answers

1. Given below are the demand schedule and supply schedule for the labour market for supervisors. Remember that demand for labour represents the employers’ demand for workers, while supply represents the workers’ willingness to work. Graph the demand and supply curve on one graph and determine equilibrium in this market. STATE the equilibrium. Label the graph properly.

Please state the wage and quantity that establishes equilibrium.

Daily Wage for Supervisors
Quantity Demanded
(000s)
Quantity Supplied
(000s)
$200 560,000 40,000
$225 475,000 65,000
$230 375,000 100,000
$270 300,000 125,000
$300 295,000 295,000
$325 200,000 350,000
$340 100,000 465,000
$365 61,000 575,000

2. Calculate the coefficient of price elasticity of demand if the daily wage goes from $230 to $270. Is elasticity at this level inelastic or elastic?
so.

Candy makers accurately anticipate the increase in demand for candy for Halloween so that the supply of candy and demand for candy increase the same amount. What happens to the price of candy and the quantity of candy?

Consider the effect of a government subsidy whereby government paid 10 percent of the wages of newly hired workers. How would employment and output be affected by the program in the classical model? What would be the effect on position of Aggregate supply schedule.

Children under age 2 are now allowed to fly free on U.S. airlines; they usually sit in their parents’ laps. Some safety advocates have urged that they be required to be strapped in infant seats, which would mean their parents would have to purchase tickets for them. Some economists have argued that such a measure would actually increase infant fatalities. Can you say why?

1. At Alexander College, the tuition fee for the domestic (Canadian) students is $285.00 per credit for the University Transfer and Associate Degree courses, while the tuition fee for the international students is $550.00 per credit (https://alexandercollege.ca/admissions-and-registration/tuition-fees-and-refunds/#1). Yet most students at the college are the international students. Explain why. For your explanation,

a. Draw the demand (for the courses at AC) and supply diagrams for two markets, (1) domestic students and (2) international students, that show the difference.

b. Explain, in words, WHY the demand (or supply) is greater in one market than in the other.

3. The demand for 1998 Honda Civics in BC is given by P = 5,400 – 200Q – 0.01I, where P is the car price in $, Q is quantity demanded (number of cars per year), and I is the average income of the buyers ($ per year). The supply is given by P = 1,000 + 200Q, where P is the car price in $, Q is quantity supplied (number of cars per year).

a. If the average income is I = $40,000 per year, what are the equilibrium price and quantity?

b. If the average income is I = $80,000 per year, what are the equilibrium price and quantity?

c. Is 1998 Honda Civic a normal or inferior good? How do you know?

A survey was conducted in 2011 to find the distribution of income levels of the people. It was repeated in 2019. What would be the change in the results if we take into account the effect of inflation.

If a firm in a perfectly competitive industry raises its price above the market price_________

Is this statement correct the short run is a time period of less than one year