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- For each stock in the stock market, the number of shares sold daily equals the number of shares purchased. That is, the quantity of each firm’s shares demanded equals the quantity of its shares supplied. So, if this equality always occurs, why do the prices of stock shares ever change?Home has 12,000 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 100, while in banana production is 75. There is now also another country, Foreign, with a labor force of 18,000. Foreign’s unit labor requirement in apple production is 120, while in banana production is 150. Graph the relative demand curve along with the relative supply curve of banana. (Q_A^D)/(Q_B^D )=1/2*p_b/p_a ↔1/( (Q_B^D)/(Q_A^D ))=1/2*p_b/p_a Assume: Demand for apples/ demand for bananas =half of price of bananas/ price of apples What is the equilibrium relative price of banana?Consider the following statement: "The market supply for natural gas is the sum of all prices that natural gas producers are willing and able to sell at for every quantity." What is the flaw in this statement? Select the correct answer. It should state that market supply is the sum of the quantities of natural gas that producers are willing and able to sell at every price. It should state that market supply is the price of natural gas that one firm is willing and able to provide a specified quantity of its product at. There is no flaw in this statement. It should state that market supply is the quantity of natural gas that producers are willing and able to sell at one specific price.
- choose one in the brackets to fill in for the following question: If the wage rate for workers in car manufacturing rises, the (supply curve , quantity supplied ) for cars will [ increase, decrease, remain unchanged ) and the [ demand curve, quantity demanded) for cars will [ increase, remain unchanged, decrease) Consider a competitive market in equilibrium at (Q1,P1). When there is an increase in demand in this market, what exactly happens in this market? Help describe what happens by selecting the correct sequence of events from the drop-down menus below. [Advice: draw this situation in a competitive market diagram.] step 1:( creates an access demand at the original market price, this allows the market to clear at the original market price , this creates an excess supply at the original market price ) step 2: (this puts upward pressure on the price, this puts downward pressure on the price , this does not affect the price in this market ) step 3: ( there is an increase in supply, as…Suppose the generic demand function of hypothetical commodity is given by Where Q* is quantity demand of commodity, Y is income, Px is price of commodity, Py is price of related good Given Y= 1500; Px = 3 and Py = 2 a). calculate price elasticity of demand and interpret the result? b). calculate income elasticity and interpret the result? c). calculate cross-price elasticity and identify the nature of the good? 2. Suppose Addis Ababa textile factory is facing the following production function with fixed supply of machineries (capital) and variable input (labor). Calculate the corresponding values of AP and MP Draw curves for TP, AP and MP of labor Identify the three stages of production and show their tabular and graphical justifications. Indicate the point where the LDMR starts to operate. The inflexion point Given Cobb-Douglas production function Q = 50 KL, if a wage rate is 25 birr per labor and the rental capital is 50 birr per capital. Determine the optimum input combinations…. Consider a market in which the demand curve is given by P = 191 - 1Q, and the supply curve is given by P = 8Q. What is the equilibrium price in the market? Give your answer to 2 decimal places.
- The market supply of lettuce in a small town is shown in the table below. Market Supply of Lettuce Quantity of Lettuce Supplied (heads) Price (dollars) Initial New $3.00 300 2.50 260 2.00 220 1.50 180 1.00 140 0.50 100 a. Suppose there is a decrease in the cost of renting land that allows lettuce growers to produce 50 more heads of lettuce at each price. Find the new quantities supplied at each price, and then complete the new supply schedule in the table. b. At a price of $1.00 per head of lettuce, the original quantity supplied was heads of lettuce and the new quantity supplied is heads of lettuce.Identify the demand or supply determinant(s) that changes and explain how the equilibrium price and equilibrium quantity in a purely competitive market will change in each of the following situations. Draw the appropriate demand and supply curves showing the change. (Each graph should have an equilibrium point before the change as well as after; be sure to label all parts of the graphs). a. Product: New homes -wages increases so consumer incomes increase and supply does not change b. Product: French cheese- A tariff is removed from the importation of French cheese while demand remains the same. C. Product: eat-at-home pizza- consumers desire for eating at home increases and the cost of flour (used to make pizza) decreasesThe market for gravel has the following demand and supply relationships: Supply function: Q = 100P - 1,000 Inverse demand function: P = 50 - 0.01*Q + PX, where P represents price of gravel per ton in dollars, Q represents sales of gravel per week in tons, and PX is the price of some other product X in dollars per unit. Let PX = $50/ton In a diagram, qualitatively describe the change that would occur in the market for gravel (i.e. equilibrium price and quantity) if a new discovery has just made the production of product X cheaper. Briefly explain whether it is a movement along or shift of demand curve and supply curve for gravel. In addition to the new discovery regarding product X in previous question), suppose now workers producing gravel ask for sick leave due to COVID. Use supply and demand analysis to predict how these two shocks will affect equilibrium price and sales. Illustrate your results in a diagram. Is there enough information to determine if market prices will rise or…
- THIS EXERCISE FOR MATHEMATICAL ECONOMIC : Question (1): Suppose the estimated quantity demand for potato chips is Q = 140 – 15p and the quantity supply function for potato chips is Q = 115 + 10p. Find the equilibrium price and quantity for the number of bags of potato chips. Suppose that the main costs of producing potato chips are labor and potatoes. On a per unit basis, the cost of producing and manufacturing a bag of potato chips rises by $1.50. The firms are citing higher labor costs and fewer potatoes are grown due to the poor climate. What will be the new equilibrium price and quantity? Whichever curve you think a shift will occur, derive the new function. Suppose that a health news piece has been published indicating the ill effects of consuming potato chips. The news has been published after the firms incurred the higher costs of production. Consumers are being advised to consume popcorn or pretzels instead of potato chips. How would that affect the market for potato…Consider the market for bicycles which is initially in equilibrium. Suppose that the number of bicycle producers increases at the same time that the cost of labour decreases. Which of the following statements is true about the market for bicycles given this information a. The equilibrium price will decrease and the equilibrium quantity will increase b. The equilibrium price will increase and the equilibrium quantity will decrease c. The equilibrium price may increase, decrease or remain the same while the equilibrium quantity will increase d. The equilibrium quantity may increase, decrease or remain the same while the equilibrium price will decreasetrue or false - explain in short be supported with an economic model. If the demand for and supply of a product both increases, the equilibrium quantity of the product must also increase. If the demand for a product decreases and the supply of the product increases, the equilibrium price of the product may increase or decrease, depending on whether supply or demand has shifted more. Assume that there is a fixed supply in the market. A higher price will result from a change in demand brought about by a rise in income.