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BU204 02 Langhoff Melissa Unit3 Essay

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Unit 3 Assignment
1) The table below indicates the total quantity supplied and demanded of flashlights at different price levels.
Price
Quantity Demanded
Per Month
Quantity Supplied
Per Month
$5
6,000
10,000
$4
8,000
8,000
$3
10,000
6,000
$2
12,000
4,000
$1
14,000
2,000

a. Draw Supply and Demand Curves. b. What are the equilibrium price and the equilibrium quantity? The equilibrium price is $4 and the equilibrium quantity is 8,000 flashlights.
c. Suppose the market price is $5. What problem would exist in the market? Does it lead to surplus or shortage? How do you expect this problem will affect the price? Indicate this on the supply and demand graphs. If the market price is $5 means that the consumers are demanding a smaller …show more content…

Explain. It is not feasible for Atlantis to produce 500 pounds of fish and 800 pounds of potatoes. This is because it is past the production possibility frontier. With the point being outside of the frontier shows that it is not possible for the country whether due to resources or personal or labor.
b. Calculate the opportunity cost of increasing the annual output of potatoes from 800 to 1000 pounds. The opportunity cost for increasing the potatoes output to 1000 pounds for be not being able to produce any fish.
c. Calculate the opportunity cost of increasing the annual output of potatoes from 400 to 600 pounds. The opportunity cost for increasing the potatoes output to 600 pounds would be only being able to produce 500 pounds of fish. This would be a loss of 100 pounds of fish.
d. What is the difference between the answers to parts b and c? The difference between parts b and c is that even though Atlantis is only changing the amount of potatoes that they produce by 200 pounds in each part the amount that fish goes down increases the more that the potatoes are increased. Just by changing it from 600 pounds to 800 pounds Atlantis would lose 200 pounds of fish. By increasing it then to the 1000 pounds would cause the decrease to 0 pounds of fish being produced. These numbers are different because when producing more potatoes the number of fish decreases by double the amount that it decreased by

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