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P = 80 – 2Q
P = 20 + 2Q
i. Find an equilibrium price (RM) and quantity (unit).
ii. Now supplier must pay a tax of RM6 per unit. Find new equilibrium price and quantity.
iii. Draw a graph that shows demand and supply curve before and after taxes.
iv. Calculate the amount of tax passed by consumers.
v. Who have do absorb most of the tax burden?
Think about a single fast-food restaurant location and a commercial airline flying out of a single airport. If quantity is represented by the number of customers served, which business has the larger economies of scale? What does this mean for the number of firms and competitiveness of these industries?
indefference curves are conxes to the origins
The U.S. government administers two programs
that affect the market for cigarettes.
Media campaigns and labeling requirements
are aimed at making the public aware of the
dangers of cigarette smoking. At the same
time, the Department of Agriculture maintains
a price-support program for tobacco farmers,
which raises the price of tobacco above the
equilibrium price.
a. How do these two programs affect cigarette
consumption? Use a graph of the cigarette
market in your answer.
b. What is the combined effect of these two
programs on the price of cigarettes?
c. Cigarettes are also heavily taxed. What effect
does this tax have on cigarette consumption?
A recent study found that the demand and
supply schedules for Frisbees are as follows:
Price per Quantity Quantity
Frisbee Demanded Supplied
$11 1 million Frisbees 15 million Frisbees
10 2 12
9 4 9
8 6 6
7 8 3
6 10 1
a. What are the equilibrium price and quantity
of Frisbees?
b. Frisbee manufacturers persuade the government
that Frisbee production improves
scientists’ understanding of aerodynamics
and thus is important for national security. A
concerned Congress votes to impose a price
floor $2 above the equilibrium price. What is
the new market price? How many Frisbees
are sold?
c. Irate college students march on Washington
and demand a reduction in the price of
Frisbees. An even more concerned Congress
votes to repeal the price floor and impose a
price ceiling $1 below the former price floor.
What is the new market price? How many
Frisbees are sold?
The government has decided that the freemarket
price of cheese is too low.
a. Suppose the government imposes a binding
price floor in the cheese market. Draw
a supply-and-demand diagram to show the
effect of this policy on the price of cheese and
the quantity of cheese sold. Is there a shortage
or surplus of cheese?
b. Farmers complain that the price floor has
reduced their total revenue. Is this possible?
Explain.
c. In response to farmers’ complaints, the government
agrees to purchase all the surplus
cheese at the price floor. Compared to the
basic price floor, who benefits from this new
policy? Who loses
suppose a consumer consuming two comodities X and Y has the following utility function U=X^0.4Y^0.6. if the price of good X and Y are 2 and 3 respectively and the income constraint is birr 50. find the quantities of X anf Y which maximize utility
In today’s situation of Covid -19 Pandemic when the offline world is affected severely. Kindly throw light over the online system of consumer behaviour with respect to the given questions:
a. Consumer behaviour with respect to online shopping of grocery items.
b. Consumer behaviour with respect to online education
