tion 17 of 21>Place each example in the appropriate category.Typical of market economiesTypical of nonmarket econommesAnswer BankConstraints exist on buyers and sellers,Output quotas and prices are set withoutRational decision making guides people.reducing profits and utility.precise knowledge about scarcity of the goods.Voluntary, self-interested trade andInformation is limited and resources are misallocated.Relative prices guide decisions.general prosperity are the norm.MacBook Air

Market economies are the economies that are generally based on demand and supply. There is freedom…

Answered: Place each example in the appropriate…

Business

Economics

Place each example in the appropriate category. Typical of market economies

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter13: Positive Externalities And Public Goods

Section: Chapter Questions

Problem 23P: HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow...

See similar textbooks

Similar questions

Jason Stilton is the chief executive officer of RightLiving a company that buys life insurance policies at a discount from terminally ill persons and sells the policies to investors for 85% of the value of the future benefit. The patients recieve the cash to use for medical and other expenses and the investors are guaranteed a positive return on thier investment. The diffreance between the purchace and sale prices is the RightLivinf Profit. Stilton is aware that some sick patients may obtain insurance policies through fraud (Not revealing thier illness on the insurance application). An insurance company that discovers such will cancel the policy and refuse to pay. Stilton beleives that most of the policies he has purchased are legitimate, but he knows some are probably not. Question Using IDDR approch, discuss the decision process Stilton should use in deciding whether to disclose the risk of fraudulent policies to potential investors.
1. Mzanzi-Ndizvo (Pty) is a vaccine manufacturing company that has the following costs ofproduction. Cost of capital is R50 000, labour cost is R30 000, and the total cost the firm is willing to pay is R300,000. Identify the type of this production function and Illustrate it with a 2D graph. 2. If the demand and supply curve for cell phones is given by: D = 80 - 4P, S = 40 + 6P In a market with a price of P for smartphones, compute the number of phones that would be bought and sold at equilibrium.
indicate whether you think the statement is true or false andexplain why. 15. The discounted rate is usually positive.16. When constant marginal cost > 0, marginal net benefit (P-MC) increases at the rate ofinterest.17. Hotelling’s rule states that the dynamically efficient allocation occurs when the presentvalue of the marginal net benefit for the last unit produced is equal across time periods.18. Monopolist over-converse resources from a dynamic efficiency perspective.19. When the growth rate in demand exceeds the discount rate, the efficient outcome in acompetitive industry will result in a larger amount of oil available for the future period thanthe current period.20. Biofuels are a back-stop technology for oil and would cause more present production ofoil
Return to Figure 9.2. Suppose P0 is 10 and P1 is 11. Suppose a new firm with the same LRAC curve as the incumbent tries to bleak into the market by selling 4,000 units of output. Estimate from the graph what the new firms average cost of producing output would be. If the incumbent continues. to produce 6,000 units, how much output would the two films supply to the market? Estimate what would happen to the market price as a result of the supply of both the incumbent firm and the new entrant. Approximately how much profit would each firm earn? Figure 9.2 Economics of Scale and Natural Monoploy
HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow HighFlyer Airlines to give passengers more comfort and sell more tickets at a higher price. However, redesigning the cabin means rethinking many other elements of the airplane as well, like engine and luggage placement, and the most efficient shape of the plane for moving through the air. HighFlyer Airlines has developed a list of possible methods to increase cabin space, along with estimates of how these approaches would affect the planes operating costs and ticket sales. Based on these estimates, Table 13.5 shows the value of R, how much should the firm invest in R on top of the private return; that is, an R private return to HighFlyer Airlines would have a 9 social return. How much investment is socially optimal at the 6 interest rate?
2. The supply Qs = s(P, Pm) has the functional form of: Qs = -12 + 0.5P - 2Pm initially, the materials cost Pm_0 = 7. Find the optimal quantity to supply if the price is P=76 and P=80. At P=76, Q_0 = . At P=80, Q_0 = . 3. Now, the cost of materials changes to Pm_1 = 9. Find the optimal quantity to supply if the price is P=76 and P=80. At P=76, Q_1 = At P=80, Q_1 = Draw the second supply curve and show how supply shifted.
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds of companies offering tax preparation in a given market. The current market equilibrium price is $170. Joe Audit’s Tax Service has a daily, short-run total cost given by TC = 1000 + 4Q2 + 10Q with marginal cost MC = 8Q + 10. How much will he earn in profit, found by total revenue minus total cost, each day?
The car manufacturing market consists of100 identical factories, each with a marginalcost curve represented by MC =120 + 20where Q represents the amount of carsoffered.a) Derive the industry supply curve for cars.b) If the demand for cars is represented byP=250- 4Q, how many cars are bought atequilibrium?c) Calculate the aggregate consumer andproducer surplus at market equilibrium.
use diagramsa. What is the effect on the equilibrium price and quantity traded in market of theintroduction of a new technology that reduces costs of production for all firms?b. What is the effect on the equilibrium price and quantity traded in a market of a changein tastes that reduces the demand for the product?c. What is the effect on the equilibrium price and quantity traded in a market of theimposition of a tax per unit sold on suppliers?d. What is the effect on the equilibrium price and quantity traded in a market of thepayment of a subsidy per unit sold paid to suppliers?
A tuition agency hires tutors to teach students. The following table displays how total outputincreases as tutors increase.No. of Tutors 1 2 3 4 5Total No. ofStudents4 10 18 24 3Tutors cost $50 each regardless of how many students each tutor has. The agency paid $500 in non-refundablemarketing fees to set up the business as a fix cost. In the short run, considering the shut-down condition, whatis the lowest price per student Tom’s tuition agency can charge? Explain your answer.
City-wide lockdowns were implemented in Sydney by the NSW government in July-August 2021 in response to new COVID-19 cases detected in the community.1. Assuming a perfectly competitive market and using a market demand and supply model:(a) Illustrate the market equilibrium for Sydney apartments before the city-wide lockdown was implemented. (b) Explain, with the aid of a new diagram, the impact of the Sydney city-wide lockdown on the market from part (a) assuming the construction industry was still allowed to operate normally.(c) Suppose the NSW government was considering doubling the first-home buyer’s grant. Explain the impact of this on the market for Sydney apartments and illustrate this on your diagram from part (b).2. Assume that builder XYZ is a monopoly in Sydney’s Southwest, who specialises in apartment construction.(a) Draw a diagram to illustrate XYZ making economic profits before the implementation of the hard lockdown in Sydney’s Southwest. On your diagram clearly indicate…
City-wide lockdowns were implemented in Sydney by the NSW government in July-August 2021 in response to new COVID-19 cases detected in the community. Assuming a perfectly competitive market and using a market demand and supply model: Illustrate the market equilibrium for Sydney apartments before the city-wide lockdown was implemented. (b) Explain, with the aid of a new diagram, the impact of the Sydney city-wide lockdown on the market from part (a) assuming the construction industry was still allowed to operate normally. (c) Suppose the NSW government was considering doubling the first-home buyer’s grant. Explain the impact of this on the market for Sydney apartments and illustrate this on your diagram from part (b). 2. Assume that builder XYZ is a monopoly in Sydney’s Southwest, who specialises in apartment construction Draw a diagram to illustrate XYZ making economic profits before the implementation of the hard lockdown in Sydney’s Southwest. On your diagram…