Economics Answers

a)      Market research has revealed the following information about the market for chocolate bars: the demand schedule can be represented by the equation QD = 1600 – 300P, where QD is the quantity demanded and P is the price. The supply schedule can be represented by the equation QS =1400 + 700P, where QS is the quantity supplied. Calculate the equilibrium price and quantity in the market for chocolate bars.

b)     Assuming the market price of chocolate is 0.5, given the equilibrium price calculated in (a) above, explain the possible market situation with the aid of a diagram.

make up an example of a supply schedule for apples and give an example of something that would shift this supply curve. Would a change in the price of apples shift this supply curve?

b) During the 1990s, technological advances reduced the cost of computer chips. How do you think this affected the market for computers? For computer software? For Typewriters?

C) Using supply and demand diagrams, show the effect of the following events on the market for sweat shifts.

i) A drought in Egypt damages the cotton crop

ii) The price of leather jackets falls

iii) All universities require students to attend morning exercise classes in appropriate attire.

Suppose that a borrower and a lender agree on the nominal interest rate to be paid on a loan. the inflation turns out to be higher that they both expected

a) Is the real interest rate on this loan higher or lower than expected? Explain your answer

b) Does the lender gain or lose from this unexpectedly high inflation? does the borrower gain or lose? Explain your answer

Assume that you have $1000,000. You are asked to construct a portfolio and you are asked to;

1. Indicate performance of your portfolio for at least 2 weeks.

2. Make sure that you have excel toshow performance of your portfolio

3. Use word documents to explain  the strategy for two weeks.

The price elasticity of demand for urban transit fares has been estimated to lie between -0.1 and -0.6. Based on these results, what is the economic argument for raising transit fares? What political arguments might local governments and transit authorities encounter in opposition to these economic arguments?

Differentiate between Optimum Firm and Representative Firm.

Output. TotalCost Price. AveageVariableCost. AverageTotalCost. MargianlCost. Profit.

0 $1,000 $500 ? ? ? ?

1 $1,200 $500 ? ? ? ?

2 $1,350 $500 ? ? ? ?

3 $1,550 $500 ? ? ? ?

4 $1,900 $500 ? ? ? ?

5 $2,300 $500 ? ? ? ?

6 $2,750 $500 ? ? ? ?

7 $3,250 $500 ? ? ? ?

8 $3,800 $500 ? ? ? ?

9 $4,400 $500 ? ? ? ?

10 $5,150 $500 ? ? ? ?

a. Complete the above table. What is the firm’s fixed cost? How can you tell? Hint: if the firm is not producing output, it still must pay its fixed cost but incurs no variable cost.

b.Graph the cost curves and draw in the price. What is the profit-maximizing price and quantity? How much profit does the firm earn? Show the profit on the graph?

c.Suppose the price rises to $550 a ton. How much output should the firm produce?

d. Think about the market in the long run. If the price remains at $550 a ton, do you think that new firms will enter or exit the market? Why? What effect do you think that will have on price in this market?

1. Discuss, using the IS-LM model, what happens to interest rates as prices change along a given AD schedule. Explain using the diagram. (300-500 words)

2. What is crowding out, and when would you expect it to occur? In the face of substantial crowding out, which will be more successful—fiscal or monetary policy? Explain using the diagram (500 words).

(P.S: I need a detailed answer around 1000 words.)