QUESTION 3 In a pure exchange economy with two goods, if there is excess demand in the market for good y, then there must be excess supply in the market for good x. O True False
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- Suppose that the supply function for lamb in Australia is Q = 149 + 8p - 9ps, where Q is the quantity in millions of kg of lamb per year, and pand psare the prices of lamb and sheep, respectively, in Australian dollars per kg. How does the supply curve change if the price of sheep increases from AU$5 to AU$5.50 per kg? (Hint: See Solved Problem 2.1.True or False. State with reasoning: The theory of second best says that if there is a distortion that cannot be removed from the market, then it is never best to get all other variables to the Pareto efficient allocation.Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium(i.e., supply equals demand in each case). Assume further that a good harvest impactsthe world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is notan ingredient in whiskey. Rum and whiskey are substitutes in consumption.(i) Discuss the impact of the good harvest on each of the three markets.
- 5. Consider the market for pizza.a. Start in Equilibrium (be sure to label all relevant points)b. Change at least one of the ceteris paribus conditions. Assuming pizza and beer go well together, consider the market for pizza if the price of beer goes up.c. Examine the changed incentive. Which curve(s) has(have) changed? Why? (i.e. – which of the ceteris paribus conditions have changed?) _______________________________________________________d. Identify the change(s) in direction, and draw into the above market.e. Finish in equilibrium. What are the effects on price and quantity?4. Demonstrate that if the markets for two commodities are in equilibrium, the third market must also be in equilibrium.usiness EconomicsQ&A Library) If the price of good X increases from RM3 to RM5, the quantity demanded drops from 10 to 12. Find the slope of the demand curve. a) 0.2 b) 5 c) -1 d) -2 Other: 8) Based on Question 7, calculate the quantity when the price is equal to 0 a) 13 b) 2 c) 10 d) 5 9) Based on Question 7, if the market price is equal to 1, determine how many units of good X will be sold in the market. a) cannot be determined b) 12 c) 10 d) 14 Oh no! Our expert couldn't answer your question. Don't worry! We won't leave you hanging. Plus, we're giving you back one question for the inconvenience. Here's what the expert had to say: (7) - wrong data. "quantity demanded drops from 10 to 12" is wrong since value from 10 to 12 is an increase, not a drop. Ask Your Question Again 6 of 10 questions left until 1/15/21 Question I. If the price of good X increases from RM3 to RM5, the quantity demanded drops from 10 to 12. Find the slope of the demand curve. a) 0.2 b) 5 c)…
- 1) In the market for smart phones, explain how will thefollowing statement impact the equilibrium price andquantity?Average incomes increase and new technology improvesproductive efficiency(Make sure that you also consider the effect on demandand supply curves where appropriate)1.The price leads to an outcome that is not competitive equilibrium because there is 2. Given tha outcome that is not competitive equilibrium,we expect price ratio to chnage1. If the demand curve for product A moves to the right, and the price of product B increases, it can be concluded that: A. A and B are substitute goods;B. A and B are complementary goods; C. A is an inferior good, and B is a superior good; D. Both goods A and B are inferior.2. If a point falls inside the production possibility curve, what does it indicate ?A Resources are over utilizedB Resources are under utilizedC There is employment in the economyD Both (b) and (c)3. In which type of economy do consumers and producers make their choices based on the market forces of demand and supply?(a) Open Economy(b) Controlled Economy(c) Command Economy(d) Market Economy4. In a free market economy, when consumers increase their purchase of a goods and the level of _______ exceeds _______ then prices tend to riseA Demand, SupplyB Supply, DemandC Prices, DemandD Profits, Supply 5) Scarcity requires that people mustA) cooperate.B) compete.C) trade.D) make…
- 1. Assume that resource X is necessary in the production of good Y. If the price of resource X increases, then A. the quantity supplied of Y will increase. B. the quantity supplied of Y will decrease. C. the quantity demanded of Y will increase. D. the quantity demanded of Y will decrease. 2. Assume that good Z is an inferior good for a consumer. If the consumer's income increases, then A. the supply of good Z will increase. B. the supply of good Z will decrease. C. the demand of good Z will increase. D. the demand of good Z will decrease.Assume that each of the markets below is initially in equilibrium. Then for each market below, suppose that the indicated scenario occurs. Illustrate the effect of each event in a diagram and indicate the effects on the equilibrium price and quantity. d. Market: Caffeinated beverages. Scenario: Starbucks opens a franchise in St. Lucia. e. Market: Cigars Scenario: The government places a tax on cigar producers to discourage smoking coupled with the private sector running ad campaigns on the detrimental effects of smoking f. Market: Ketchup. Scenario: Insects kill half the nation’s tomato cropYou are considering shoplifting a head of broccoli from the farmer’s market in SLO. Your buyer value for the broccoli is $1.75. The broccoli is available for legal purchase for $1.50. For comparison purposes, assume that if you don’t steal the broccoli, you will make the choice that makes you best off within the law. Which statement below is correct? Group of answer choices: -Stealing the broccoli leads to an increase in total surplus but also causes a reduction in surplus for owners of the broccoli. -Stealing the broccoli leads to a decrease in total surplus and also cause a reduction in surplus for owners of the broccoli. -Stealing the broccoli leads to an increase in total surplus and does not harm anyone else. -Stealing the broccoli does not lead to an increase or decrease in total surplus and also causes a reduction in surplus for owners of the broccoli.