Search & Filtering
You have recently received a report from the Chief Finance Officer (CFO) indicating that the price elasticity of demand for the electronic equipment is 1. 6. Advise the CFO on what the figure 1.6 means and explain the relationship between price elasticity of demand and total revenue. (Use relevant diagrams to explain your answer)
Using market supply and market demand curves describe how the market will react to the introduction of statutory minimum wage
- The Bahamas has experienced several adverse supply shocks in the past that has challenged the stability of the economy, however, much of this downturn was mitigated by government intervention. This approach runs contrary to the classical remedy. Evaluate the government’s efforts to reduce the impact of these adverse shocks (use specific examples).
a. Real wage and employment decrease
b. Real wage and employment increase
c. Real wage increase and employment decrease
d. Real wage decrease and employment increase
- If the supply curve for aspirin is perfectly elastic, then a reduction in demand will cause the equilibrium price to stay the same and the equilibrium quantity to fall. Illustrate with a graph.
- Briefly discuss how greater consumption of a good affect utility
Rakhi likes to consume only two commodities X and Y, and nothing else. Both the commodities give her positive utilities, thereby giving rise to her preferences being wellbehaved and convex. However, she treats commodity X as an inferior good. Suppose Rakhi earns an income of 1000 per month and the ongoing prices of commodities X and Y are 20 and 10, respectively. a) Show, with the help of a diagram, what will happen to her optimal consumption of commodity X, in each of the following circumstances: i. Situation A: Price of X falls to 10, while everything else remains the same. (1.5 marks) ii. Situation B: Her income increases to 2000, while prices remain the same. (1.5 marks) b) What can you say about the demand curve for commodity X that Rakhi’s choice behavior would produce? Elaborate. (2 marks) Use diagrams to support your answers.
a) With an increase in the r-factor of the Coronavirus, people are extremely worried and are anticipating a lockdown in their city. Hence, they have started buying some of the staples and dry ration like wheat, rice, pulses, noodles etc. in bulk. What kind of impact this development will have on the market of food and related products, discuss with the help of a diagram? b) Gradually, the suppliers of food and related products internalized the fact and made bulk orders of the items, so that they can continue to cater this sudden unexpected increase in demand. How will this new development impact the market of food and related products, discuss with the help of a diagram?
