Economics

A corporate business enterprise is established under a specific legal framework where laws governing the operations and functioning of the enterprise are outlined. The activities of the enterprise are monitored and therefore such an enterprise is recognized by law. This is important due to the fact that legal suits can be filed by the enterprise within the provisions of the law.

#5. Other things equal, what effects would each of the following have on aggregate demand or aggregate supply? In each case use a diagram to show the expected effects on the equilibrium price level and the level of real output.

a. This particular industry has a constantly increasing cost. There will be an increase in the demand for input factors for one key reason. Every day, new companies will be introduced into this market of remodeling, economic profits being the encouraging factor. Because of this, there will be a bid up on input prices for the companies in the industry of remodeling. “When a market is characterized by a large number of small producers, the demand curve facing the manager of each individual firm is horizontal at the price determined by the

1. When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent. In this range of prices, demand for this product is ( )

d. Calculate the price elasticity of demand in each market and discuss these in relation to the prices to be charged in each market.

11. Describe a product, and then give an example of a time when the demand for this product might be high and the demand for this product might be low. (2-4 sentences. 2.0 points)

The likely impact on food prices in the United States if the supply of oranges were reduced, and the consumption of corn for fuel was to increase, would be to expect an increase in food prices. When events such as a deep freeze happen and the result is a decrease of supply the market will experience an increase in the equilibrium price if all other things remain consistent. If the president called for an increase in ethanol produced from corn, the supply of corn available to provide as food will decrease, and the decrease

1. (10 pts.) Stella Ann Freeman is having a difficult time deciding whether or not to purchase a new car. How would understanding the concept of opportunity costs help her make a decision?

____ 16. If two goods are ____, then an increase in the price of one leads to ____ in the quantity demanded of the

related to her supply curve, just as a buyer’s willingness to buy is related to his demand curve.

a.) Draw and properly label the demand and supply graphs (this means you must label the axes and any lines you include on the graph).

2. The productivity of making product decreased; however, the price of the product increased thus they are increasing profit. Thus,

c. Suppose the price is currently $2. Will this price result in a shortage or a surplus? How much is the shortage or

1) According to the Law of Demand, the demand curve for a good will A) shift leftward when the price of the good increases. B) shift rightward when the price of the good increases. C) slope downward. D) slope upward. Answer: C 2) An increase in the price of pork will lead to A) a movement up along the demand curve. B) a movement down along the demand curve. C) a rightward shift of the demand curve. D) a leftward shift of the demand curve. Answer: A 3) An increase in consumer incomes will lead to A) a rightward shift of the demand curve for plasma TVs. B) a movement upward along the demand curve for plasma TVs. C) a rightward shift of the supply curve for plasma TVs. D) no change of the demand curve for plasma TVs. Answer:

Evaluate each of the following changes in supply and/or demand. How will each affect equilibrium price and quantity in a competitive market? Will price and quantity rise, fall, or be unchanged? Based on shifts, will the answers be indeterminate?