Economics Answers

Given that C=C1 = cy and C1=500, c3/4, y=1000
1)total consumption is 500
2)total consumption is 1250
3)aggregate demand is 1000
4)marginal propensity to consume is 1/4

Suppose in a region each household produces either 1 pair of shoes or 1 gallon of milk per hour. One mile of round-trip travel takes 12 min. A firm produces shoes. The firm faces CRS in production and charges competitive price.
a. What is the slope of net price curve?
b. The market radius of the firm is 4 miles. What is the firm’s average cost of producing shoes?

Suppose the price of an inferior good,product A is currently 14 dollar and is produced at a marginal cost of 10.50 dollar per unit. The estimated price elasticity of demand for product A To be 2.5. The producer of product A should____ as the optimal price indicated by the Current elasticity is_____.
Given options; a) increase the price 15.50 b) increase the price 17.50 c) decrease the price 13 d)leave the price unchanged 14 dollar

Use clearly labeled diagrams to explain the effect to the equilibrium price and quantity of Good X if:
a) The cost of producing Good X is increased
b) The consumer income increased.

Markets are very good at allocating scarce resources toward what?

How does equilibrium level of income is determined? which factors do changes in the national income?

For each of the following statements, draw a diagram that
illustrates the likely effect on the market for eggs. Indicate
in each case the impact on equilibrium price and equilib￾rium quantity.
a. A surgeon general warns that high-cholesterol foods cause
heart attacks.
b. The price of bacon, a complementary product, decreases.
c. An increase in the price of chicken feed occurs.
d. Caesar salads become trendy at dinner parties. (The dressing
is made with raw eggs.)
e. A technological innovation reduces egg breakage
during packing.

2. Suppose in a region each household produces either 1 pair of shoes or 1 gallon of milk per hour. One mile of round-trip travel takes 12 min. A firm produces shoes. The firm faces CRS in production and charges competitive price.
a. What is the slope of net price curve?
b. The market radius of the firm is 4 miles. What is the firm’s average cost of producing shoes?

Discuss five determinants of economic growth in an economy. (25)