Explain the three functions of the price mechanism in an economy!

Q: If the price of a good rises, then the effect on the income of the factors that are used intensively…

A: The theorem that discusses about the effect of changes in the price of the goods on the price of the…

Q: Imagine the inputs prices are falling in an economy as a result there will be____. a. Expansion of…

A: We know that there is positive relationship between aggregate supply curve and prices.

Q: Companies that extract crude oil are not the only entities responsible for the price of gas. What is…

A: Consumers are acutely aware of rising gasoline prices. Because of this, rising fuel prices (rather…

Q: Suppose the price of protein feed (a complement in production) decreases, and at the same time, the…

A: There is inverse relationship between price and quantity demanded which is demand law . And postive…

Q: Price s1 S2 D2 D1 Quantity Suppose equilibrium is at Point D. The price of the good is expected to…

A: Change in demand implies that the demand curve is either shifting to the right or left. This occurs…

Q: Calculate the effect of a price floor on the equilibrium priceand quantity.

A: Answer - Price floor - It is the minimum level of price imposed on the commodity or good. Under this…

Q: How do prices attain a state of equilibrium? Give a specific example

A: Demand and supply forces have a role in determining market pricing and volumes. According to the law…

Q: Please match each scenario to the inflation term it best exemplifies. I inflation  Deflation…

A: Inflation refers to the persistent rise in the level of prices over the period, depicting a fall in…

Q: Define “Price” for goods and services by different schools of thought up to Adam Smith. Explain the…

A: Smith arranged the foundations of classical free market theory. The Wealth of states was a precursor…

Q: Consider the following: “If a price is not an equilibrium price, there is a tendency for price to…

A: Equilibrium is accomplished at the cost at which amounts requested and provided are equivalent. We…

Q: When prices are falling, economists say that there is

A: Price is defined as the amount of money which has to be paid in order to acquire a given product or…

Q: Why expectation for future prices is one of the factors that can affect supply?

A: Supply is a positive function of price. Firms increase their supply when the price of their goods…

Q: P. a, o, Quantity Demanded Refer to the diagram. In the PP price range, demand is Price

A: Elasticity is the degree of responsiveness of demand with respect to the change in the price of the…

Q: KKTV 11 News wants to interview you, a leading economics expert in Colorado Springs, to learn why it…

A: The demand for both the greeting cards and roses increases on Valentine's Day as it is a trend to…

Q: During 2009, incomes fell sharply due to the financial crisis of 2008-2009. This change likely led…

A: In a competitive market, there exists a large number of buyers and sellers of a good or service. In…

Q: If incomes of Americans decrease, we can expect the supply curve to shift leftward and be negatively…

A: If the income of the consumers decreases, it would affect their consumption basket. Their purchasing…

Q: What is the Quantity Demanded, Quantity Supplied,and Price Solution? Qd=14-2P Qs=2+4P

A: Quantity demanded refers to the total amount of service or good that the consumers demand over a…

Q: The exception to law of demand is

A: To find : Which is exception to law of Demand.

Q: If the prices of both goods increase by 50% while income remains constant what will happen?

A: Budget line equation is given by  I = Px . X + Py. Y

Q: If the price of s table is $10, dascribe the forces that will cause the price to change in year 1…

A: When the price is $10, then in year 1 demand is 130 and supply is 115. There is a shortage of 15…

Q: The Paradox of Thrift: Consider the simple model of the good markets: Y = C +I+G C = Co + C1(Y – T)…

A: Savings is referred to the amount of money that a person has left over after deducting their…

Q: Identify the most accurate statement. A price floor will have the largest effect if it is set: a.…

A: Meaning of Price Floor: The term price floor refers to the situation under which the government…

Q: People are more likely to notice the decrease of 2 Jordanian Dinars in the price of an olive oil…

A: It is given that the difference in prices of Jordanian diners by 2  will be observed more in olive…

Q: Why is it difficult for producers of oil to just raise the price of oil if they want a price…

A: Oil prices are effected by a variety of factors, particularly the decisions about output made by…

Q: Over the years, the demand for textiles in Country A has grown in spite of rising prices. How would…

A: Demand is defined as the want that is backed by purchasing power. The law of demand states that,…

Q: Which of the below pictures represents an decrease in the price of H? A. T () B H. (#) B. T. (#) (#)…

A: The measure that depicts the quantities being demanded by consumers of a good at various levels of…

Q: What do price level changes affect when dealing with demand and supply curves

A: INTRODUCTION  The law of demand and supply is a monetary hypothesis that clarifies how market demand…

Q: If the amount of currency in the market place goes up because more loans are being purchased with…

A: The foreign exchange market includes firms, families, and financial backers who buy foreign…

Q: Alyssa spends all of her money on comic books and mandarins. In 2014, she earned $27.00 per hour,…

A:

Q: As the number of borrowers increases, what happens to interest rates? You should be able to work out…

A: The loanable funds market illustrates the supply of savings and the demand for loans. The equilbrium…

Q: what is the mechanism by which supply creates its own demand.

A: Demand is a desire to purchase commodities and a will purchase a commodity by  giving  price for a…

Q: What variables cause the simple sticky price AS curve to shift? What variables cause the partial…

A: The aggregate supply curve estimates the connection between the value level of products provided to…

Q: People who study __________________ __________________ believe that flexible prices cause markets to…

A: According to the theory of flexible price, if there is excess of products or labor in the market,…

Q: Question For each sentence below describing changes in the tangerine market, discuss whether the…

A: The minimum measure of remuneration that an employer is expected to pay wage workers for the work…

Q: What is an example of a change in relative price compared to a change in general price?

A: Relative price is the price of a good and service in terms of price of another good and service. In…

Q: How do changes in the interest and unemployment rates impact the supply curve?

A: Interest rate: - it is the percentage charge on the principal amount from a lender to a borrower.…

Q: find marketequilibrium price for quantity for a good that has the following supply and demand…

A: Market equilibrium is when quantity demanded and quantity supplied are equal. In the question we…

Q: Why constant income is one of the assumption of law of demand?

A: The relationship that price and quantity demanded are inversely related is given by the law of…

Q: Given a fixed demand curve, which of the following is affected when the price changes? a) income…

A: Answer: Explanation; The demand curve is the inverse relationship between quantity demanded and…

Q: With the aid of a diagram, explain the meanings of 'pecuniary price", 'non- pecuniary price' and…

A: Pecuniary price is the price paid by the consumers that is lower than the market price. Lower price…