Economics Answers

Use the following two equation, Using the two equations to find the values of Qd, Qs, the market situation (Shortage/Surplus/Equilibrium), and the Value of shortage or surplus if any, at the following prices: 3.044, 3.65, 3.88, and 3.95.  

QS = 972 + 103.5P 

 QD = 1722 – 141.5P 

A- Calculate the equilibrium price and the equilibrium quantity. Show all your work. 

972 + 103.5P = 1722 – 141.5P 

1722 – 141.5P = 972 + 103.5P 

If marginal revenue is greater than average revenue, average revenue increases.

1. True

2. False

The basic reason for the rising part of the short-run marginal cost curve is the declining part of the marginal product curve which, in turn, is the result of the law of diminishing returns..

1. True

2. False

The basic reason for the rising part of the short-run marginal cost curve is the declining part of the marginal product curve which, in turn, is the result of the law of diminishing returns..

1. True

2. False

The difference between the long and the short run in production and cost theory depends on the variability of inputs.

1. True

2. False

If a firm has a total revenue of R80 000 per annum and economic cost of R110 000, it earns an economic profit of R30 000.

1. True

2. False

Both product curves and cost curves are based on the law of diminishing returns.

1. True

2. False

If total cost increases, the marginal cost is positive.

1. True

2. False

Using arc method calculate the elasticity of demand for oranges when the price

rises from $2 to $3 Price per orange, its demand reduces from 80 thousands oranges

to 70 thousands oranges. Interpret your answer in term of the farmer’s revenue.