Economics Answers

1)   With regard to achievement of stability of equilibrium in an isolated market assume that the market for string beans is found to have a lagged supply response such that the demand and supply function may be written as

D_t = aP_t + b

S_t = AP _t-1 + B

Required: Derive the conditions for dynamic stability of equilibrium

1. Suppose that the demand for crude oil is given by Qd =85- 0.4P, where Qd is the quantity demanded in millions of barrels per day and P is the price per barrel in dollars. Suppose also that the supply of crude oil is given by Qs= 55 + 0.6P.

a) Calculate equilibrium price and quantity in this Market

b) Graph the demand curve and the supply curve

c) Calculate the demand for crude oil and the supply for crude oil if the market price is $ 15.00 per barrel. Explain your answer.

d) Calculate the demand for crude oil and the supply for crude oil if the market price is $50.00 per barrel. Explain your answer.

2. What type of relationship exists between the firm’s average physical product curve and the average cost curve in the short- run?

The weekly demand function for a product Z sold by a given supermarket is 30, 000 units when its price was birr 2. A10% rise in the price of product Z results in the weekly demand to fall by 2000 units. Then drive The demand function

Why have Canadian house prices increased so quickly this year? And what is a possible solution to slow down house prices to make homes more affordable? Make sure to use concepts from our course in your explanation.

As the price of tickets rises from $200 to

$250, what is the price elasticity of demand

for (i) business travelers and (ii) vacationers?

(Use the midpoint method in your

calculations.)

b. Why might vacationers have a different

elasticity from business travelers?

a) describe the properties of Cobb Douglas production function with respect to return and scale.

b) Discuss the sources of risk and uncertainty in production of agricultural good

4, SANUMARC produces fingerlings for sell. The quantity x (kg) of these fingerlings demand each week is related to the wholesale unit price by the equation p=-0.006x+180

The weekly total cost incurred by SANUMARC for producing x kgs of fingerlings C(X)=0.000002x^3-0.02x^2+120x+6000

a) find the marginal cost function C

b) find the marginal revenue function R

c) find the marginal profit function P

d) Compute P (2000) and interpret the results

Given that we do not know the demand schedules, does the concept of consumer surplus have any practical relevance? Or do we have to make assumptions to generate the equation for the demand schedule and then compute the consumer surplus? If so, why not assume the value of the consumer surplus. Examine the sensitivity of the consumer surplus to changes in two of the factors that are assumed as given when computing the consumer surplus.

Select from the following list the qualitative characteristic (Predictive value, Confirmatory value, Materiality, Completeness, Neutrality, Freedom from error, Verifiability, Comparability) of useful information that best describes each of the following items:

1.In order to keep the financial statements simple, Carlaw Consulting shows three items on its income statement: Revenue, Expenses and Net income

2.The financial statements of Belbach Industries are audited on an annual basis by public accountants.

3.Rydell Corporation is contemplating an investment in Fryan Ltd. Rydell has requested a copy of the company’s year-end financial statements to assist them in their investment decision

4.Chemical Reaction Inc. operates in both the US and Canada and restates its US financial statements according to Canadian GAAP for its Canadian investors

5.The Controller for Location Inc. emphasizes that factual and unbiased information prevails in the preparation of the company financial statements.