Economics Answers

a) Define equilibrium price and equilibrium quantity with a suitable diagram.


b) The demand function for ice cream cones is P = 800 - 2Q, and the supply function of ice cream cones is P = 200 + 1Q.

The price of a cone is expressed in cents, and the quantities are expressed in cones per day.

i) Determine the equilibrium price and quantity.

ii) Draw the curve and show the equilibrium price and quantity according to answer in (i).

iii) What will happen in the market when the market price is lower than the
equilibrium price? Explain.

In two sentences, state the way in which capital expenditure are treated in accounts and why.

Can there be any advantage in classifying things? Explain with a example from your daily life

it is orthodox to say people’s desire has no boundary from the time past, even in the face realistic limited resources, individual agents never stop to want more of economic output”.

In a typical daily income-leisure choice model, wage rate is increased from $4 per hour to $8 per hour. Assume leisure is a normal good. b. If income and leisure are perfect 6-for-1 complements, analyze the substitution and income effects. c. If income and leisure are perfect 6-for-1 substitutions, analyze the substitution and income effects.

State the factors affecting price elasticity of demand

price mechanism role in market action by allocating scarce resources among competing needs in free market and provide a real world example

why is the supply curve upwards sloping

6. Joy’s Frozen Yogurt shops have enjoyed rapid growth in northeastern states in recent years. From
the analysis of Joy’s various outlets, it was found that the demand curve follows this pattern:
Q = 200 - 300P + 120I + 65T - 250Ac + 400Aj


a. What would be the effect of a $5,000 increase in the competitor’s advertising expenditure?
Illustrate the effect on the outlet’s demand curve.
b. What would Joy’s advertising expenditure have to be to counteract this effect?

Q6)Company versus Project Discount Rates.Geothermal WACC is 11.4 percent. ExecutiveFruit’s WACC is 12.3 percent. Now Executive Fruit is considering an investment in geothermalpower production. Should it discount project cash flows at 12.3 percent? Why or whynot?