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Under what circumstances may the demand for the commodity be inelastic?
Discuss the view that a market economy is always preferable to a planned economy.
Henry Ford famously mass-produced cars at the beginning of the twentieth century, starting Ford Motor Company. He made millions because mass production made cars cheap to make, and he passed some of the savings to the consumer in the form of a low price. Cars became a common sight in the United States thereafter. Keeping total revenue and its relationship with price in mind, do you expect the demand for cars to be elastic or inelastic given the story of Henry Ford?
Do you expect the demand for cars to be elastic or inelastic? Why?
Discuss two likely causes of an increase in demand for cars in Kigali.
The market supply curves and market demand curves for books are given as follows:
Supply curve: P = 0.000002Q
Demand curve: P = 11 – 0.00002Q
The short-run marginal cost curve: MC = 0.1 + 0.0009Q
The equilibrium quantity of books is
Global warming is becoming a serious problem for mankind. According to the Coase Theorem government should leave this matter to the market to solve. Do you agree? Argue your case with the aid of economic theory.
1． Draw the figure of the market equilibrium for the wheat market. Show what will happen if pesticide cost increases.
2. Consider a consumer who has $100. The price for food is $1 /unit. The price for clothing is $2 /unit. Draw the budget line for this consumer. And draw a new budget line when the consumer’s wealth increased to $200 and the price of clothing increased to $4 /unit.
3. The demand curve is p=10-q. Calculate the consumer surplus and the total expenditure if the market price is 6. Calculate the consumer surplus again if the market price is 4.
Which of the following will definitively lead to an increase in the equilibrium quantity of a good?
an increase in demand and an increase in supply
an increase in supply and a decrease in demand
a decrease in supply and a decrease in demand
a decrease in demand and an increase in supply
1． The demand curve is p=10-q. Calculate the consumer surplus and the total expenditure if the market price is 6. Calculate the consumer surplus again if the market price is 4.
2. Consider a consumer who has $100. The price for food is $1 /unit. The price for clothing is $2 /unit. Draw the budget line for this consumer. And draw a new budget line when the consumer’s wealth increased to $200 and the price of clothing increased to $4 /unit.
3． Draw the figure of the market equilibrium for the wheat market. Show what will happen if pesticide cost increases.
What would you expect to happen to the price of chicken samosas if the price of flour decreased and the price of chicken meat decreased?
What would happen to the equilibrium price and quantity of chewing gum if income decreased and more firms started producing chewing gum?
