Economics Answers

Suppose the Market is in equilibrium and then the demand decreases. Which of the following will contribute to reaching the new equilibrium price?

Select one:

a. Excess demand at the initial equilibrium price

b. Excess supply at the new equilibrium price

c. Excess supply at the initial equilibrium proce

Suppose the marketis in equilibrium, and then the demand decreases. What will contribute to reaching the new equilibrium price

The population in country C decreases, due to lower birth rate. At the same time there is an increase in the cost of fertilizer which is used to grow vegetables. Explain how the market for vegetables will be affected by these changes. Clearly indicate how the equilibrium price and equilibrium quantity will be affected by these changes. Make use of a combinations of diagrams and verbal explanations.

Due to substantial increase in prices in Country A, The real income level of the population in Country A decreases. Show a diagram how the decrease in the income level in Country A will affect the demand for meat, which normal Good, in How the equilibrium price and equilibrium Quantity of meat will change in Country A

Explain why recessionary gap and inflationary gap are closed

Due to substantial increases in prices in Country A, the real income level of the population in Country A decreases. Show on a diagram how the decrease in the income level in Country A will affect the demand for meat, which is a normal good.

Price($)          Quantity(‘000 ton)

350                 5

300                 10

250                 20

200                 25

150                 30

100                 40

50                   55

A town has 80 households and two production firms on fast food: Alpha & Beta,

If Alpha reneges on the agreement and produces Q = 30 tones and Beta will produce the remaining tones with market quantity 55 ton and cost $25 per ton.  Calculate Alpha’s and Beta’s profits.(10 marks)

How can monetary policy be used to boost aggregate demand

Due to substantial increases in prices in Country A, the real income level of the population in Country A decreases, show a diagram how the decrease in the income level in Country A will affect the demand for meat which is a normal good. Also indicate how the equilibrium quantity of meat will change in Country A