Economics Answers

If the supply equation is given as Q=-200+10P, the price elasticity of supply between R40 and R50, calculated using the arc elasticity of demand, is?

How is scarcity a major problem to economics

. Assume that the demand for a product X is:
Qdx = 4,500 – 0.5Px + Py – 6Pz + 0.05M,
where Px is unit price of product X,
Py is unit price of product Y,
Pz is unit price of product 1Z, and
M is average income of consumers of product X.

Assume that demand and supply for a product over a period of time, respectively, are:

Qdx = 15 – 0.5Px and Qsx = 0.25Px – 3.



Calculate the equilibrium price and quantity. Clearly show your steps and manual calculations.

Quantify and discuss the impact of imposing a price of $20 per unit on the market, including the full economic price paid by consumers. Clearly show your steps and manual calculations.

If government should impose a $8 excise tax on the product, determine the new equilibrium price and quantity. Clearly show your steps and manual calculations. Graphically illustrate your answer.

Calculate the amount of tax revenue that government would earn with $8 excise tax. Clearly show your steps and manual calculations.

Altrix makes a line of high tech tools that are used to repair medical devices. The company has been
asked to produce a new tool that would require a metal spring they do not currently make. Before they
accept the contract for the new tools, managers must decide whether to make the spring in a part of the
factory that is currently idle, or buy it pre-made from another company. The contract is for 8,000 tools,
and each tool needs a spring.

Here are the demand and supply schedules for pizza: (I arranged them like this because a table would be hard to draw.

Price($/cup) 1 2 3 4 5 6 7

Quantity Demanded (pizza/day) 440 415 390 365 340 315 290

Quantity supplied (pizza/day) 330 360 390 420 450 480 510

A) What is the equilibrium price of pizza

B) How many cups of coffee would be exchangedd at this price

C) How would I graph the demand and supply curve on the same graph?

D)Supposed that an increase in population increases quantity demanded at every price by 110 cups per day. What is the new equilibrium price of coffee

E) Has there been movement along or a shift of the demand curve. Has there been movement along or a shift of the supply curve.

Assume that the demand for a product X is:
Qdx = 4,500 – 0.5Px + Py – 6Pz + 0.05M,
where Px is unit price of product X,
Py is unit price of product Y,
Pz is unit price of product Z, and
M is average income of consumers of product X.

Determine the relationship between (i) products X and Y and (ii) products X and Z, i.e., determine whether Y and Z are substitutes or complements for product X. Provide a justification for each case.
Determine whether product X is a normal or an inferior good. Explain.
Given that Py = $4,760, Pz = $85, and M = $75,000, derive the inverse demand function for product X. Clearly show your steps and calculations.
Graph the demand curve for product X.
Determine the size of the consumer surplus at $10,500 per unit price of X. Clearly show your steps and manual calculations.

Your brother in law manages a corn farming business . At a recent family gathering , he confided in you that he is very happy because he expects a record crop of corn this year . Your brother in law is fully aware that all the corn farmers will have record crops as well . Why is he so happy ? Explain fully in 3 lines

calculate standard deviation
X: 2 4. 6. 8. 10
Y: 2. 3. 4. 2. 4

Consider the following model of national income determination
C = 300 + 0.75 (Y-T)
T = 100
I = 475
G = 150

i) List the entire exogenous and endogenous variable. (2 marks)

ii) Solve for the equilibrium value for all the endogenous variables. (2 marks)

iii) Suppose government expenditure increase by 50 find the new equilibrium values of the endogenous variables. Assume the economy of Kenya is described by the following information
Y = C + I + G (x - M) x = 20
C=20+0.8Yd M = 4 + 0.3Y
T = 30 Yd=Y-T
G = 22 I = 30 (8 marks)