Economics Answers

The income elasticity is +2.5 and income increases by 20%. Sales were 5000 units, what will they be now?

Place the following events in the order they might occur once rent control is implemented in a crowded, impoverished neighborhood.
Drag the items below into the box above in the correct order, starting with the first item in the sequence.
Apartment rental prices are capped by the local government.
Property owners receive less income from their properties.
Many apartment buildings become dilapidated.
Property owners cannot afford to maintain buildings properly.

Assuming the equilibrium price of a 5kg bag of mealie meal is R45 Explain with aid of labelled diagrams what will happen if government
1. Fixes a minimum price of R40 for a 5kg bag of mealie meal
2. Fixes a maximum price of R40 for a 5kg bag of mealie meal

if qx=25-2.5px+5/3py+0.5I where px=20 py=15 and I=100. what is the cross elasticity of demand

why do competitive firms stay in business if they make zero profit?

Suppose an economy is in recession with a negative GDP gap of $800 billion. If MPC is 0.9, how much should the government spend to eliminate the negative GDP gap?

15.10.18, 21:21
Given the following equations for a certain economy: Y = C + I + G + X (Income identity) C =100 +0.9Yd (Consumption function) I = 200 –500r (Investment function) X = 100 – 0.12Y –500r (Net export) G = 200 (Government purchases) T = 0.2 (Tax rate) L = Y-100r (Real money demand) M = 800 (Real money supply).
Derive equations for IS and LM curves . Determine the r and y pair at which the two markets are clearing iii) Compute the values of C, I, X and L

Assume a consumer with the utility function
U = U(X, Y) = (X + 2)(Y + 1)
M = 95, Px= 10, and Py= 5
A Set up the consumers’ budget constraint
a. Set up the constrained maximization problem, and derive the first-order conditions.
b. Find the amounts of goods X and Y the consumer will purchase in equilibrium

Qd = 50- 8P
Qs = -17.5 + 10P
a) At the equilibrium price calculate the consumer’ and producers’ surplus.
b) If a price floor of shs 5 is imposed on good X in this market
i) what is the new consumers’ surplus and by how much has it changed?
ii) what is the new producers’ surplus and by how much has it changed?
c) Calculate the transferred surplus. And state from who to whom is it.
d) Calculate the deadweight loss of the price floor

Assume a consumer with the utility function
U = U(X, Y) = (X + 2)(Y + 1) M = 95, Px= 10, and Py= 5
Set up the consumers’ budget constraint