Economics Answers

In general, changes in price and quantity depend on the amount by which the

demand and supply curves shift, in which direction they shift and the shape of

each curve. With this statement in mind, illustrate by drawing a single graph the

new price and quantity at a new equilibrium when both curves shift to the right,

but the shift in the demand curve is larger than the shift in the supply curve.

What do you understand price elasticity of supply to be? Indicate if the

coefficient is usually positive or negative and why. (3)

3.4 With reference to price elasticity of demand, answer the following

questions:

3.4.1 Indicate what the two (2) main determinants are that price elasticity

of demand depends on. (2)

3.4.2 With the aid of a diagram (draw the diagram), illustrate and explain

what a linear demand curve is, where exactly the top of the curve is

and where the bottom of the curve is, and how elasticity values

(coefficients) vary on the curve from being infinitely (perfectly)

elastic to unit elastic and finally to completely (perfectly) inelastic.

A change in wages causes a _____

A. change in the marginal product curve for labour.

B. shift in the marginal physical product curve for labour.

C. shift in the derived demand curve for labour.

D. shift in the marginal revenue curve for labour.

E. movement along the demand curve for labour.

A change in wages causes a _____

A. change in the marginal product curve for labour.

B. shift in the marginal physical product curve for labour.

C. shift in the derived demand curve for labour.

D. shift in the marginal revenue curve for labour.

E. movement along the demand curve for labour.

Which statement is incorrect?

A. The quantity that the monopolist produces for sales on the market is

substantially less than that supplied by a perfectly competitive

industry.

B. Monopolists make excess profits in the long run.

C. The price fixed by a monopolist is lower than the price of perfect

competition.

D. A monopoly could utilise economies of scale.

E. Under monopolistic competition, economic profit can be earned in the

short run.

Nash equilibrium can be defined as the competitive outcome where _____

A. all firms set prices equal to average cost and all firms make economic

profit.

B. each firm sets a price equal to marginal cost and each firm makes

economic profit.

C. each firm sets a price higher than marginal cost and each firm makes

economic profit.

D. each firm sets a price lower than marginal cost and each firm makes

economic profit.

E. firms set a price lower than average cost and all firms make economic

profit.

If the price elasticity of demand is 1.6 and a firm increases the price of its

product by 10%, it would expect its total revenue to _____

A. decrease by 16%.

B. increase by 16%.

C. increase by 6%.

D. remain constant.

E. decrease by 6%.

Factors of production _____

A. are normative concepts.

B. are studied primarily in microeconomics.

C. represent the classification of different resources available to an

economy.

D. represent the trade-offs as you move along the demand curve.

E. represent the trade-offs as you move along the isoquant curve.

what Is Accounting?

Explain the main contribution for Irving Fisher, Economist of neo-classical school of Economic Thought and how his contributions have improved the modern day understanding and application of Economics.

( In 400 words)