Economics Answers

The income elasticity is +2 and income increases by 20%.sales were 5000 units, what woill they be now

how does the slope of IS-LM curve affect the impact of monetary and fiscal policy on output and rate of interest.

Using AS-AD framework, analyze the impact of an increase in money supply (one time) on output and price level both in short run and medium run

1. When the value of a good’s price elasticity of demand is greater than 1,

(a) A reduction in price causes a reduction in total revenue.

(b) An increase in the price causes a decrease in total revenue.

(c) An increase in the price causes an increase in total revenue.

(d) An increase in price causes no change in total revenue.

(e) None of the above.

1) The government decides there is no relationship between drinking and health problems. It lowers the excise taxes on gin. Ceteris paribus can be expected to cause the equilibrium quantity of gin sold to:

a) Increase.

(b) Decrease.

(c) Not change.

(d) Decrease at an increasing rate.

(e) There is not enough information to answer this question.

2) Sometimes coffee growers in Brazil have destroyed some or their entire coffee crop in order to keep it from going to market. This suggests that:

(a) They believed that there was an international shortage of coffee.

(b) They believed that coffee was an inferior good.

(c) They believed that the demand for coffee was inelastic.

(d) They believed that they faced an inelastic supply curve for coffee.

(e) None of the above.

Suppose the price of the good is 5, and that is increases by 5\% . As a consequence, the demand of another good decreases by 20 * o/o . Calculate the cross-price elasticity for the other good. Is the other good a substitute good or a complementary good to the first one?

Firm’s total cost function is given as 4Q3 – 40Q2 + 10Q. This firm operates in a perfectly competitive market. What is its profit maximizing level of output?

Production function of a firm has the following form: 

Q= 48L2 – 4L3 , where L stands for amounts of labor and Q represents level of output

Find the level of output at a point where marginal product reaches its maximum.

a firm faces the following demand function: Q=25 – 0,25P. Its total cost function is given by the following relation: TC=2Q2 – 50Q+850. Calculate firm’s fixed cost at the level of output of 520 units.

1. A product’s production function is given as Q=50KL. Assume all factors of production are variable. What would be the minimum level of output of production if a firm wants to produce 2000 units of output. Price of labor is 20, price of capital is 80.