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Suppose demand for inkjet printers is estimated to be QX = 1000 – 5PX + 10PY – 2PZ + 0.1M. If own price (PX) = 80, related prices, PY = 50, PZ = 150, and income, M = 20,000; answer the following:
A. Calculate own price elasticity of demand and interpret your result
B. Calculate cross price elasticity of demand between X and Y and interpret your result
C. Calculate cross price elasticity of demand between X and Z and interpret your result
D. Calculate Income elasticity of demand and interpret your result
If a 12 percent rise in the price of orange juice decreases the quantity of orange juice demanded
by 22 percent and increases the quantity of apple juice demanded by 14 percent, calculate the
a. Price elasticity of demand for orange juice.
b. Cross elasticity of demand for apple juice with respect to the price of orange juice.
Suppose that you are the member of the Board of Governors of
the State Bank. The economy is experiencing the severe
unemployment. What changes in
A. The Reserve Ratio
B. The Discount Rate
C. Open Market Operations
would you recommend? Explain in each case how the change you
advocate would affect the money supply, interest rate and aggregate
demand and authenticate your arguments with monetary transmission
mechanism diagram.
Suppose the production function for a newly discovered product through research is given by Y = 100 (L- F), where Y = output of the new product, L = labor input, and F =fixed amount of labor input required to invent the idea (cost incurred before the first unit of output can be produced). Assume that there is no production if L < F; and each unit of labor L costs a wage rate w.
(a) Find the cost function C(y) that represents the minimum cost required to produce Y units of output.
(b) Given a price P which the firm faces for each unit of output produced, show that the firm cannot make profit and operate in perfectly competitive market settings.
Choose two (2) examples of consumer goods and services in the output market that has a clear impact due to the pandemic. The examples of the goods and services could be either from the buyers’ side or the sellers’ perspective. Illustrate and explain your answers with the help of diagrams (pre-pandemic and during pandemic).
An economy following a flexible exchange rate regime is in its long run equilibrium while suffering from a trade deficit. Would a reduction in government spending be helpful in eliminating the trade deficit? Explain indicating all co-movements both in the short run and the long run (assuming that Ricardian Equivalence holds)? How would this policy affect the trading partner of the home country? Use the IS-LM-FE and the foreign exchange market diagrams to explain.
Why the Central Bank of the trading partner may option for a fixed exchange rate regime. If the exchange rate were to be fixed between the initial and the new equilibrium values in domestic economy, what do you think the policy would imply? What effects would it have on the home economy and the trading partner?
why the central bank of trading partner may option for a fixed exchange rate
A manufacturer has two products p1 and p2 both of which are produced in two steps by machines m1 and m2 . the process times per hundred for the products on the machines using simplex method
Suppose demand for inkjet printers is estimated to be QX = 1000 – 5PX + 10PY – 2PZ + 0.1M. If own price (PX) = 80, related prices, PY = 50, PZ = 150, and income, M = 20,000.Calculate own price elasticity of demand and interpret your result
#333702 on Dec 2022