Which of the following statements is correct Multiple Choice If supply increases and demand increases, equilibrium quantity will rise. If supply increases and demand increases, equilibrium price will rise. If supply increases and demand increases, equilibrium quantity will fall. If supply increases and demond remains constant, equilibrium price will rise. supply decreases and demand remains constant, equilibrium price will fall
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- The rules of politics are not always the same as the rules of economics. In discussions of setting budgets for government agencies, there is a strategy called closing the Washington Monument. When an agency faces the unwelcome prospect of a budget cut, it may decide to close a high-visibility attraction enjoyed by many people (like the Washington Monument). Explain in terms of diminishing marginal utility why the Washington Monument strategy is So misleading. Hint: If you are really trying to make the best of a budget cut, should you cut the items in your budget with tile highest marginal utility or line lowest marginal utility? Does the Washington Monument strategy cut the items with the highest marginal utility or line lowest marginal utility?Ewa spends all her 600 PLN bonus on the purchase of sweets and cosmetics. Draw the Ewa's budget line, knowing that her favorite sweets cost PLN 10 per pack and the price of cosmetics is PLN 25. •How will Ewa's situation be affected by the PLN 50 bonus increase? •What will happen if the price of cosmetics increases to PLN 30? •How, from the point of view of initial situation, we will evaluate the following quantitative combinations: –30 packages of sweets and 15 cosmetics –60 packages of sweets and 24 cosmetics –20 packages of sweets and 10 cosmetics –10 packages of sweets and 15 cosmeticsa. A young connoisseur has $600 to spend to build a smallwine cellar. She enjoys two vintages in particular: a 2001French Bordeaux (wF) at $40 per bottle and a less expensive 2005 California varietal wine (wC) priced at $8. Ifher utility is U (wF, wC))=wF2/3 w C1/3 ,then how much of each wine should she purchase?b. When she arrived at the wine store, this young oenologistdiscovered that the price of the French Bordeaux hadfallen to $20 a bottle because of a decrease in the valueof the euro. If the price of the California wine remainsstable at $8 per bottle, how much of each wine shouldour friend purchase to maximize utility under thesealtered conditions?c. Explain why this wine fancier is better off in part (b)than in part (a). How would you put a monetary value onthis utility increase?
- Currently, the demand equation for necklaces is Q = 30 – 4P. The current price is $10 per necklace. Is this the best price to charge in order to maximize revenues?* If $10 per necklace is not the best price, what is?* Explanation: Solve for the best price to charge in order to maximize revenues. Show any steps or processes used to reach the answer above. Explain your process as though you are teaching the concept to a student who is a beginner in economics.*If Ty's marginal utility for a cup of coffee is 20 and his marginal utility of a donut is 10, then A. they should both be purchased. B. coffee should be his next purchase. C. a donut should be his next purchase. D. price information is also needed to determine what Ty should purchase next.True/False/Uncertain: 1. In taking an exam, Atack, a rational student, allocates his time to the various questions so as to equalize hismarginal point utility per minute on all questions. 2. The marginal utility of food to Zecher depends only on the amount of food (and not on the amount ofhousing) and the marginal utility declines as more food is consumed; likewise for housing. Therefore,both food and housing are normal goods. (Hint: Express the optimality condition for Zecher’s [UMP], MUF/MUH = PF/PH. Notice that PF/PH is fixed. If all of an increase in income is spent on F, can the equality be maintained?)
- Question Earlier this year, 2021, the price of chicken meat rose unexpectedly reached to 250/ kilo at peak from the previous price of 170/ kilo. This 68% increase of price per kilo was primarily caused by excess demand for chicken meat. This is the result of the decrease in consumption for pork meat due to the threat of African Swine Flu (ASF). However, even though consumer shifted preferences, the increase in the price of chicken was perceived to be too high for the budget of consumers. Therefore, sellers realized decrease in their daily aggregate sales from 1,000 kilos to 700 kilos. 1. Illustrate the change in the market equilibrium through a graph. 2. What presumably happened to the total revenues of the sellers during the price hike period? a.) Compute the price elasticity of demand b.) Derive the total revenue before the hike (TR1), and after the hike (TR2).(a)Diagrammatically show and explain how oil prices dropped as concerns over fuel demand in the near term in COVID-19 pandemic hit Europe and the United States. (b)Diagrammatically show and explain what happened to the oil market if the price remained unchanged despite the concerns over the fuel demand. (c)You sell two different goods: printers and toner cartridges. The price elasticity of demand for the printers is -3.4, and you earn a revenue of RM15,000 per month from the good. You earn a revenue of RM5,000 per month from the toner cartridges. The cross price elasticity of demand for both of the goods is -2.5. If you decide to decrease the price of the printers by 5%, calculate your new total revenues for…Wherein:TU = Total Utilityf= is a function ofMU = Marginal UtilityO = units of consumptionA= infinitesimal change EMV= Expected Monetary Value
- DEF only pleaseEarlier this year, 2021, the price of chicken meat rose unexpectedly reached to 250/ kilo at peak from the previous price of 170/ kilo. This 68% increase of price per kilo was primarily caused by excess demand for chicken meat. This is the result of the decrease in consumption for pork meat due to the threat of African Swine Flu (ASF). However, even though consumer shifted preferences, the increase in the price of chicken was perceived to be too high for the budget of consumers. Therefore, sellers realized decrease in their daily aggregate sales from 1,000 kilos to 700 kilos. 1. Illustrate the change in the market equilibrium through a graph. 2. What presumably happened to the total revenues of the sellers during the price hike period? a.) Compute the price elasticity of demand b.) Derive the total revenue before the hike (TR1), and after the hike (TR2).Earlier this year, 2021, the price of chicken meat rose unexpectedly reached to 250/ kilo at peak from the previous price of 170/ kilo. This 68% increase of price per kilo was primarily caused by excess demand for chicken meat. This is the result of the decrease in consumption for pork meat due to the threat of African Swine Flu (ASF). However, even though consumer shifted preferences, the increase in the price of chicken was perceived to be too high for the budget of consumers. Therefore, sellers realized decrease in their daily aggregate sales from 1,000 kilos to 700 kilos. Illustrate the change in the market equilibrium through a graph. What presumably happened to the total revenues of the sellers during the = price hike period? Compute the price elasticity of demand. Derive the total revenue before the hike (TR1), and after the hike (TR2).
