1. Based on the following figure, draw the effects of the following changes: Q-100,000 a. The price of L rises. b. The prices of L and K rise by the same proportion. c. The firm's budget increases.
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- Select the number of the question and the letter to indicate the answer you consider correctfor each question. 1. The Law of demanda. applies to final consumer goods but not to the productive resources purchased bybusiness firms.b. tells us how much of a good people want, but not necessarily how much of that good theyare willing to pay for.c. tells us that when the price of a good falls, quantity demanded will increase.d. applies only to goods that are not absolute necessities. 2. The law of supply states that all other things remaining the same:a. as the price of a good increases, supply of the good will increase.b. as the price of a good increases, the quantity of the good supplied willincrease.c. as the price of a good increases, demand for the good will increase.d. as the price of a good increases, the quantity of the good demanded willdecrease. 3. Which of the following most appropriately illustrates the law demand?a. Sellers increase the amount they sell because the price of the…II. Determine the effect on equilibrium price and quantity sold if the following changes occur in a particular market" ceteris paribus". Use the comparative static analysis.SECTION A Answer All Questions 1. Which of the following questions is a type that tools of econometrics are meant to answer? A. If goods A and B are substitutes and the price of good A increases by KSH 10, by how much will the quantity demanded of good B change by? B. If goods A and B are substitutes and the price of good A increases, how will this affect the demand for good B? C. If an income increase causes the sales of good A to fall, everything else held constant, what type of good is good A? D. Everything else the same, would the price of good A be higher in a competitive industry or a monopolistic industry? 2. Consider the model Qª = ƒ (P, P³,Pº, INC) where Qªis quantity demanded of a bar soap per month, P is the price per bar of soap, Ps is the price of substitutes, P is the price of complements, and INC is monthly income. This equation represents A. a non-linear model B. an economic model C. an econometric model D. an interval forecast
- What can cause the demand curve to shift in? a. Increase in income b. Technological Decline C. Diminished tastes and preferences d. Technological Advancement9 3. What is wrong with the statement: “If the market price of good Z rose to $100,000, then no one could afford to buy it”? Use a graph to answer. please explain your answer. Also, use economic terms and not mathematics. thank you.2 A Long December This winter is hotter than normal, so people want fewer wool scarves than before...however, a new breakthrough in genetic engineering caused many sheep to grow hair (used to make wool) much faster this year. Show what happens in the market for wool. In the left graph, show a big change in D and small changein S. In the right graph, show a small change in D and a big change in S. Please indicate what happens toprice and quantity relative to the initial equilibrium. Either price or quantity will be ambiguous in eachinstance, so each question will have 2 possible graphs. Draw them both. BE SURE TO LABEL axes andcurves.P. QP, QWhich change is ambiguous, price or quantity? What happens to the other one?(flip the pape
- Wine A B F E с Bread D Refer to Figure 2-1. The most inefficient point depicted is: Point A Point C Point E Point GOnly typed answer and don't use chat gpt Refer to Figure 4.1, which shows Molly's and Ryan's individual demand curves for compact discs per month. Assuming Molly and Ryan are the only consumers in the market, if the market quantity demanded is 5, the price must be A. $3. B. $6. C. $9. D. $12.As an Economics student you have been analysing the price movements of differentproducts. You note the following two price relationships:a. When there is a drought the price of maize rises.b. When the price of potatoes increases, the price of bread also increases (bread is asubstitute for potatoes).Use demand and supply diagrams to explain these two relationships. Please note: Twodiagrams are required, one for maize and one for bread.
- As coffee becomes more expensive, Joe starts drinking tea instead of coffee, This is called: a. a decrease in demand. b. a decrease in reservation price. c. the substitution effect of a price change. d. the income effect of a price change.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.Beef (An Inferior Good) S₁ S2 P D₁ D2 Which of the following would best describe the graph above? O a. Increase in the Price of Leather, Increase in Income O b. Increase in Population, Increase in Expected Future Price O c. Increase in Wages, Increase in Beef Quality Od. Increase in Price of Chicken, Increase in Price of Beef O e. Decrease in Income, Increase in the Price of Leather