Economics Answers

If the price elasticity of demand for tractors priced between $4,000 and $6,000 is -0.75 (using the mid-point method), what will be the percentage change in quantity demanded when the price for tractors falls from $6,000 to $4,000?

Assume a linear demand function of the form:

Qd = 120 - 5P and a linear supply curve of the form:

Qs = -30 + 10P

Using these demand and supply functions, answer the following questions.

Assume a linear demand function of the form:

Qd = 120 - 5P and a linear supply curve of the form:

Qs = -30 + 10P

Using these demand and supply functions, answer the following questions.

If the price elasticity of demand for tractors priced between $4,000 and $6,000 is -0.75 (using the mid-point method), what will be the percentage change in quantity demanded when the price for tractors falls from $6,000 to $4,000?

“The concerns of economics will not go away because of the fact of scarcity and the desire for

efficiency.” Justify the statement.

 Are the following statements true or false? Explain in each case. a. Two countries can achieve gains from trade even if one of the countries has an absolute advantage in the production of all goods. b. Certain talented people have a comparative advantage in everything they do. c. If a certain trade is good for one person, it cant be good for the other one. d. If a certain trade is good for one person, it is always good for the other one. e. If trade is good for a country, it must be good for everyone in the country.

A consumer’s utility function over goods X and Y is U(X,Y)=XY + 10Y. Suppose this

consumer has an income of $110, the price of good Y is $2, and the price of good X

is $1. What is the optimal consumption bundle (X*,Y*) for this consumer?

A firm has the following total cost function 𝑻𝑪 = 𝟏𝟎𝟎𝒒 − 𝟓𝒒² + 𝟎. 𝟓𝒒^3.

a. Find the average cost function.

A firm has the following demand function 𝑷 = 𝟐𝟎𝟎 − 𝟐𝑸 and the average cost of 𝑨𝑪 = 𝟏𝟎𝟎/𝑸 + 𝟑𝑸 − 𝟐𝟎.

a. Find the profit function.

b. Estimate the marginal cost function.

c. Obtain the production that maximizes the profit.

d. Evaluate the average cost and the marginal cost at the maximizing production level.

Consider a firm with the following production function 𝑸 = 𝟓𝟎𝟎𝟎𝑳 − 𝟐𝑳².

a. Find the maximum production level.

b. How many units of labor are needed at that point.

c. Obtain the function of marginal product of labor (𝑀𝑅𝐿).

d. Graph the production function and the 𝑀𝑅�