1. True/False: Partial equilibrium analysis only concerns supply or demand alone, whereas general equilibrium analysis concerns supply and demand simultaneously. 2. True/False: In general equilibrium analysis, an allocation is said to be as a reasonable allocation if each consumer consumes the same bundle its value is no more than the value of the consumer's income. 3. True/False: In general equilibrium analysis, an allocation is said to be as a reasonable allocation if each consumer consumes the same bundle its value is no more than the value of the consumer's income.
Q: College tuition has been rising at a faster rate than average prices for decades. Assess how the…
A: A product's price elasticity of demand may be seen as a measurement of the change in consumption of…
Q: Suppose that demand for cruise ship vacations is given by P =1200 − 5Q, where Q is the total number…
A: Given information: Demand function, P = 1200 - 5Q Marginal cost = $300 Number of sellers = 3
Q: Are carbon prices working? Economists say that raising the cost of burning coal, oil, and gas is a…
A: The cost of missed opportunities is the benefit that might have been obtained from an alternative…
Q: You are considering quitting your job where you earn $3,500 per month and opening a new business.…
A: Here, it is given that an individual quits his job to start a business in which he pays various…
Q: The Council had previously debated the issue of the basic income grant without reaching consensus.…
A: According to the specifics of the situation, "income" might be understood in a number of various…
Q: Find the present value at 10% interest of the series of payments below: End of year 1 2 3 Net Cash…
A: The present value is the current value of the future stream of income. The present value is affected…
Q: p=200-2q, re q is the number of rounds of golf that he plays per year. The manager of the Northlands…
A: Demand function (DF) DF shows the amount of a product that is being requested by a person at…
Q: Why have intellectual property rights (IPRs) become a major issue in recent rounds of international…
A: The rights that people are granted over their creative works are known as intellectual property…
Q: A steel company is trying to decide between two industrial type cranes. Crane A and Crane B are…
A: In the present worth method, we find the present values of all the cash flows.
Q: Quantity Fixed Costs Variable Costs Total Costs 0 100 0 100 1 100 75 175 2 100 160 260 3 100 ??? 340…
A: The measure that depicts expenses that are incurred for carrying out day to day transactions of a…
Q: What is the effective interest rate per payment period for an interest rate of 12% compounded…
A: The interest rate that accounts for the compounding periods over the course of a repayment plan is…
Q: The main objective of a supply chain is to maximize the overall value created. Briefly describe the…
A: A supply chain is the network of all the individuals, organizations, resources, activities and…
Q: STEADY AS SHE GOES AFFIL BALANCED BUDGET THE ECONOMY Reprinted with permission from The Detroit News…
A: Government’s budget depends on revenue and spending.
Q: An institution that oversees the banking system and regulates the money supply is known as…
A: Central Bank is the most important institution in an economy.
Q: LRAS) for a hypothetical economy. Initially, the expected price level is equal to the actual price…
A: The SRAS curve demonstrates that the amount of real GDP that will be generated in an economy…
Q: How you calcute for the rest?
A: Elasticity is a term used to describe a variable's sensitivity to changes in another variable. The…
Q: How long will Mr. Gutierrez earn ₱750,000 if he wants to invest by depositing ₱13,315.42 at the end…
A: In the question, it is given that, The deposited amount at the end of every quarter is P13,315.42.…
Q: (c) What is the total consumer surplus (for both groups)?
A: Given Private customer's demand: QP=2000-100P .... (1) The market of department stores demand:…
Q: How is the opportunity cost of holding money determined? Question 18 options: by consumer income…
A: The opportunity cost of holding cash is the worth of the following best option in contrast to…
Q: 2. Use the following table to determine the absolute advantage and comparative advantage of China…
A: Absolute advantage represent the ability of an individual or country to produce a greater quantity…
Q: A corporate jet costs $1,350,000 and will incur $200,000 per year in fixed costs (maintenance,…
A: Capital Recovery Cost is the cost of the asset or it is the equivalent annual cost for calculating…
Q: Scenario: The matrix shows the payoffs to two firms when they choose between two different…
A: Given, Payoff matrix of two firms:
Q: (Note: Rounding your answer to the nearest tenth if you have decimal points) When you click the…
A: Dear student, you have asked multiple sub-part questions in a single post.In such a case, as per the…
Q: a demand given by Qs = 4000 - 100P. The marginal cost of one more alteration is constant and al to…
A: DISCLAIMER “Since you have asked multiple question, we will solve the first three question for you.…
Q: Why do some firms practice price discrimination? Relate your answer to the common practice of public…
A: A pricing technique known as price discrimination is when companies sell the same goods or services…
Q: 1) What factors convince you to place your money with a particular organization? What specific…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: 20 Net Capital Outflow 10 -5 8 9 -15 -10 0 5 10 NET CAPITAL OUTFLOW (Billions of dollars) 15 20 NCO…
A: Net capital outflow (NCO) is the net progression of assets being contributed abroad by a country…
Q: An integrated, combined cycle power plant produces 295 MW of electricity by gasifying coal. The…
A: Firstly we calculate the profit from power plant - 1 Megawatt = 1000 Kilowatt 295 MW = 295000KW 2…
Q: Calculate the benefit cost ratio for the following three alternatives. Each alternative has a 10-…
A: A cost-benefit analysis is a method that is the most common way of contrasting the anticipated cost…
Q: An FI has purchased a $201 million cap of 8 percent at a premium of 0.70 percent of face value. A…
A: Income is divided into two parts , one is income and other is saving and the net saving is the…
Q: The elasticity of demand for home computers is -2.5, the elasticity of demand for business computers…
A: Price Elasticity of Supply refers to the percentage change in quantity of a good that producers or…
Q: The following diagram presents a circular-flow model of a simple economy. The outer set of arrows…
A: circular flow of income is the economic model which represent the flow of income between household…
Q: The following graph shows the current short-run Phillips curve for a hypothetical economy; the point…
A: Short run Philips curve shows inverse relationship between inflation and unemployment rate
Q: An economist estimates that a market has a demand curve of the form P = 26 - (0.867) Q and a supply…
A: Given Demand equation: P=26-0.867Q…
Q: Explain why some of the institutions are on anti-globalization move? What issues are being raised?
A: Anti-globalization: It refers to the hostile to globalization activists who look to supplant or…
Q: Exhibit: Demand and Price Elasticity 2 Price 58 is price inelastic is price elastic has a slope of…
A: According to the given graph, when moving from point D to point E, Initial quantity demanded is 6.…
Q: If the required reserve ratio were to decline, what effect would this have on the money supply?…
A: Answer: Required reserve ratio: it refers to the fraction of total deposit that is kept aside by…
Q: b. Over the last 10 years, price of new models of smart Phones increased by 25%. At the same time,…
A: As per the law of demand, ceteris paribus, there is an inverse relationship between the price of the…
Q: 1. Suppose the production function for sea waters during a particular period is represented by…
A: Q = F(K,L) = 6000 K2 L2 - 1000 L3This is a given production function which explains the relationship…
Q: Examine the graph. Sellers who are unable to sell their good at a price floor of $6 may still be…
A: In a market, price floor refers to the minimum price that a seller will get for a good and services…
Q: 1.Explain the role of government in social responsibility in terms of how governments and businesses…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Education benefits society as a whole. That is why, among other things, studies at colleges and…
A: Subsidies A benefit supplied to a person, company, or institution is known as a subsidy, and it is…
Q: y faces a short-run trade-off between inflation and unemployment. b. A reduction in the rate of…
A: Economics has two different types of statements, namely the normative and the positive. These…
Q: State a brief description of Globalization
A: Globalisation refers to the integration of world economies. Over the past half century ,…
Q: In the foreign exchange market, what could be a possible consequence of an increased preference by…
A: The measure that depicts rate of one currency being measured in terms of another currency in order…
Q: If the consumer's income increases: O a the budget constraint shifts out and its slope does not…
A: NOTE: Handwritten questions are not allowed as per Bartleby Guidelines. The consumer Income…
Q: 3. Why is corruption is such a pervasive problem in many developing countries?
A:
Q: A small monopoly manufacturer of widgets has a constant marginal cost of $15. The demand for this…
A: In economics, the marginal cost of production is the change in total production cost that comes from…
Q: the bank makes small loans (known as microcredit) to the impoverished without requiring collateral.…
A: Financial entities that accept customer deposits and lend them to borrowers for investments are…
Q: In determining monetary policy, what role do regional Federal Reserve Banks have? What do you…
A: The Federal Reserve is the national bank of the United States of America. A piece of its main goal…
Step by step
Solved in 2 steps
- Choose the correct answer. Coffee and doughnuts are complements in consumption. Suppose bad weather in the coffee producing regions of the world, which shifts the coffee supply curve leftward. How do the general equilibrium price and quantity outcomes compare to the partial equilibrium outcomes for this situation? A. General equilibrium price and quantity are higher. B. General equilibrium price is higher and quantity is lower. C. General equilibrium price is lower and quantity is higher. D. General equilibrium price and quantity are lower.2: Assuming all necessary assumptions hold, discuss why every competitive equilibrium allocation is Pareto efficient but not every Pareto efficient allocation is a competitive equilibrium alloca- tion.Two individuals, Fred and Helen, are in an economy with no production, and each have the utility function U = 10XY. Prices of both X and Y are set at $1. Initial endowments for Fred are 10 units of X and 6 units of Y. Helen has 8 units of X and 12 units of Y. Find the general equilibrium prices and allocation, then show that the G.E. allocation is Pareto efficient.
- Which is the correct answer ? Coffee and doughnuts are complements in consumption. Suppose bad weather in the coffee producing regions of the world, which shifts the coffee supply curve leftward. How do the general equilibrium price and quantity outcomes compare to the partial equilibrium outcomes for this situation? A. General equilibrium price and quantity are higher. B. General equilibrium price is higher and quantity is lower. C. General equilibrium price is lower and quantity is higher. D. General equilibrium price and quantity are lower.Jane has 11 liters of soft drinks and 10 sandwiches. Bob, on the other hand, has 9 liters of soft drinks and 10 sandwiches. With these endowments, Jane's marginal rate of substitution (MRS) of soft drinks for sandwiches is 6 and Bob's MRS is equal to 8. Draw an Edgeworth box diagram to show whether this allocation of resources is efficient. If it is explain why. If it is not, what changes will make both parties better off? Part 2 1.) Using the three-point curved line drawing tool, draw an indifference curve for Jane when consuming 11 liters of soft drinks and 10 sandwiches. Label this curve UJ. 2.) Using the three-point curved line drawing tool, draw an indifference curve for Bob when consuming 9 liters of soft drinks and 10 sandwiches. Label this curve UB.3 Consider a pure exchange economy with 2 consumers and 2 goods. Consumer ? owns 8 units of good 1 and 1 unit of good 2, and his preference is represented by the following utility function: uA(x1, x2) = x1*x2. Consumer ? owns 2 units of good 1 and 4 units of good 2, and his preference is represented by the following utility function: uB(x1,x2)=x1+x2. Assume that the two consumers are allowed and able to trade with each other, and that good 1 is the numeraire. In this case, both consumers act as price-takers. Price takers: a market participant that is not able to dictate the prices in a market. Therefore, a price taker must accept the prevailing market price. Please find the competitive equilibrium of this pure exchange economy.
- Explain why an economy in which airlines charge different passengers different prices for the same flight will not have exchange efficiency. b. Going back to our two good (Apples, Oranges), two person (Ed, Mary) economy, suppose that at a given allocation, Ed’s MRSAO is 3 and Mary’s MRSAO is 1. Use proof by contradiction to show that this allocation is not exchange efficient. Identify a trade that will increase the utility of Ed and Mary. Explain. Show this graphically (with indifference curves). Going back to our two good (Apples, Oranges), two person (Ed, Mary) economy, suppose that at a given allocation, Ed’s MRSAO is 3 and Mary’s MRSAO is 1. Use proof by contradiction to show that this allocation is not exchange efficient. Identify a trade that will increase the utility of Ed and Mary. Explain. Show this graphically (with indifference curves).Assume you are spending your full budget and purchasing such amounts of X and Y that the marginal utility from the last units consumed is 40 and 20 utils respectively. Assume (a) the prices of X and Y are $8 and $4 respectively; (b) it takes 3 hours to consume a unit of X and 1 hour to consume a unit of Y; and (c) your time is worth $2 per hour. In equilibrium, if you included the opportunity cost of time then, you should substitute X for Y until the marginal utility per hour is the same for both products. should consume X and Y in the equal amounts. should consume less of Y and more of X. should consume less of X and more of Y.Explain how non-convexity in choice can result in multiple optimal choices. Provide a graphical solution.
- Use the Fundamental Theorem of Exchange and draw Edgeworth Box diagrams to show the conditions necessary for an 'efficient' allocation of two goods between two individuals. Use this model o evaluate the statement: "If two individuals have identical endowments of both goods there are no possible gains from trade". Hint: you need to develop your explanation of the theory and the efficiency conditions step-by-step. You need to draw several diagrams showing Edgeworth Box (rather than drawing one complicated crowded diagram).Suppose a consumer has income of 1000, and buys pizza and coke. The price of pizza is 100 and price of coke is 50. Draw a budget line that represents the set of bundles this individual can afford if they use all their income. (Put movies on the X axis). Label the places where the budget line intercepts each axis and the slope of the line. Suppose that in consumer equilibrium this individual consumes 7 pizza and 6 coke. What rules must hold in consumer equilibrium? Label this bundle in your drawing (call it point “A”). Draw an indifference curve associated with this bundle, and explain how its slope at the equilibrium point relates to the slope of the budget line. Consider the bundle 2 pizza and 8 coke. Label this point. What can you say about the slope of the indifference curve that passes through the point? (For example, is it bigger than, equal to, or smaller than -1?) Now suppose that income goes up to 15oo. Illustrate how the budget constraint will change. If both goods are…Assuming the two good case. When a person is attempting to maximize utility and income increases, then: a. The budget constraint expands, shifting the budget line outward indicating more choices are now affordable and a higher utility level is now possible. b. The budget constraint contracts, shifting the budget line outward indicating more choices are now affordable and a higher utility level is now possible. c. The budget constraint expands, shifting the budget line inward indicating more choices are now affordable and a lower utility level is now possible. d. The budget constraint contracts, shifting the budget line outward indicating more choices are now affordable and a lower utility level is now possible.