5) Give a detailed analysis of supply side economics. a. Graphically illustrate a negative supply shock. b. Graphically illustrate the Laffer curve and explain the policy implications. C. Discuss the key provision of supply side economics.
Q: Suppose that Portugal and Germany both produce fish and cheese. Portugal's opportunity cost of…
A: Given:-Opportunity cost of Portugal for producing a pound of cheese=3 pound of fishOpportunity cost…
Q: Price ceilings O A. keep the market prices higher than would otherwise be the case. B. prevent the…
A: The price ceiling is the maximum price that can be charged to buyers. The price can not rise above…
Q: Suppose that the inverse demand for a upstream firm is P = 150 - Q. It also produces a critical…
A: The Marginal refers to the change in the total revenue when one additional unit of good is sold out.…
Q: 5. Calculating tax incidence Suppose that the U.S. government decides to charge beer consumers a…
A: Tax incidence refers to distribution of total tax between consumer and producer. In other words it…
Q: Which of the following solutions will internalize any negative externalities, and which will…
A: Externalities are costs or benefits that affect parties who did not choose to incur that cost or…
Q: Explain why firms continue to produce additional goods even after Marginal Cost (MC) beg rise (at…
A: Optimal price / quantity and profit for a firm: A firm always tries to maximize its profits given…
Q: Discuss the evolution of world trade that has led to the formulation of the WTO.
A: The World Trade Organization (WTO) is an international organization established in 1995 that deals…
Q: Suppose that Portugal and Switzerland both produce jeans and stained glass. Portugal's opportunity…
A: Given information:There are two countries, i.e., Country P and Country SThey produce two goods,…
Q: You own a landscaping company. You currently have 3 employees and are considering hiring a fourth.…
A: Addition to the total product gives the marginal product. This can be found by calculating the…
Q: If Zambia is open to international trade in limes without any restrictions, it will import Suppose…
A: Import is the difference between the domestic demand and domestic supply. Import = Quantity demanded…
Q: f Synergy believes Dynaco will go with a large budget, it will choose a budget. If Synergy believes…
A: Best response strategy is the strategy profile that gives the player maximum payoff corresponding to…
Q: A monopolistically competitive firm maximizes profits when it احتراحة العبارات a. produces the…
A: Monopolistic competition is a kind of market structure in which there are numerous sellers offering…
Q: Pessimistic consumer and business confidence and decreased government spending are both associated…
A: Aggregate demand is the total demand for goods and services in an economy. Aggregate demand shall…
Q: Price (dollars per pound) $3.00 2.50 1.75 0.50 12 18 26 38 45 Select one: U.S. Supply Pw+tariff…
A: A tariff is a type of tax that is imposed on imported goods and services and because of the tariff…
Q: 1. The graph below illustrates the marginal abatement cost curve for a firm's carbon dioxide…
A: Marginal abatement cost is cost of reducing additional unit of emission.
Q: If higher tariffs, such as those enacted by the Smoot-Hawley trade bill, reduce the imports of the…
A: Higher tariffs, often used as a protective measure to shield domestic industries from foreign…
Q: Refer to the accompanying table, where Q represents the qua quantities, and P represents the price…
A: Social Optimum:The social optimum refers to the point at which the allocation of resources in an…
Q: George is a musician who enjoys playing two different instruments. His utility function is given by…
A: Utility function : U = 8G0.5 + SPrice of Guitar = PgPrice of Sitar= Ps Utility level to be…
Q: The table above shows some pieces of information about the labor market condition in a country. It…
A: Equilibrium employment level and wage rates in a labor market are decided by the point where the…
Q: A supermarket sells two brands of coffee: brand A at $p per pound and brand B at $q per pound. The…
A: Revenue is the total amount received when a good is soldRevenue is calculated by multiplying the…
Q: A reduction in the tariff on imported steel would most likely benefit O a. the domestic consumers of…
A: Global trade is analogous to a global symphony, with countries trading products and services at…
Q: George is a musician who enjoys playing two different instruments. His utility function is given by…
A: Utility function : U = 8G0.5 + SPrice of Guitar = PgPrice of Sitar= Ps Utility level to be…
Q: For the production function Q = L² +0.5K², returns to scale: O is constant O Can be increasing,…
A: Return to Scale:Return to scale refers to the effect on output or production when all inputs are…
Q: Suppose now that the government decides to increase the number of quotas available to 72 units, but…
A: Demand refers to the quantity of a good or service that consumers are willing and able to purchase…
Q: Average income increases from $10,000 / month to $11,000 / month. Quantity demanded per month…
A: Income elasticity of demand measures how the quantity demanded of a good responds to a change in…
Q: The three people described in the following table are categorized as unemployed by the Bureau of…
A: Unemployment has a negative effect on a nation's economy. For instance, unemployment raises the cost…
Q: 6. The term "opportunity cost" refers to: A) The explicit cost of production B) The value of the…
A: Opportunity Cost: It refers to the foregone revenue on the next best alternative if we pick a…
Q: Consider the following production function: Assume capital is fixed at K = 25. At what level of…
A: It can be defined as a concept that shows how much the additional quantity of the output can be…
Q: A country produces only meat and potatoes in the quantities and prices listed below. Use 2011 as the…
A: GDP is the gross domestic product. GDP is defined as the market value of all the final goods and…
Q: If a market is NOT in equilibrium, then which of the following is likely to occur? O The supply…
A: The market is said to be in equilibrium if the supply of goods and services matches demand. The…
Q: Use the following graph to answer the following questions. Line Y Price level (P) Line Z * B Line X1…
A: The aggregate demand curve shows the quantity of output that households, firms, the government, and…
Q: 3. Individual and market demand Suppose that Dmitri and Frances represent the only two consumers of…
A: The demand curve is the downward-sloping curve.A demand schedule is the tabular representation of…
Q: The ation of the average annual growth rate of real GDP OA. is more complex when examining, data for…
A: The average annual growth rate of real GDP provides a measure that reflects the yearly growth, on…
Q: The demand for Good X is given in the graph shown here. Which of the following could cause the shift…
A: The demand curve is a graphical representation of the inverse relationship between price and…
Q: Price 10 8 6 4 A 2 2 B C 4 6 D E 8 10 12 Quantity Refer to the graph shown. Which point has an…
A: Elasticity shows the degree of responsiveness of demand of a commodity with reference to change in…
Q: Suppose that Gilberto and Juanita are the only consumers of pizza slices in a particular market. The…
A: Calculate the market demand as the sum of the two individual demands PriceGilberto's QDJuanita's…
Q: Which of the following would cause an increase in the price level in the long run? Choose one:A.…
A: Price level refers to the monetary value of a goods or services that is sold in the market. In a…
Q: If marginal revenue is -0.0062+1,322 and the cost per unit is 0.9, how much do profits increase by…
A: Marginal revenue is the additional revenue a firm earns by selling one extra unit of its item. This…
Q: The graphs illustrate an initial equilibrium for some economy. Suppose that the economy experiences…
A: Aggregate demand is a macroeconomic concept that represents the total demand for all finished goods…
Q: Flour is an ingredient used to make kolaches, but is not used to make queso. Which of these graphs…
A: The production possibility curve shows the maximum quantities of kolaches and queso that an economy…
Q: Usher Raymond Hours Needed to Make 1 Song Rap R&B 6 3 2 6 Based on the table above, what is the…
A: PPF is the production possibility frontier. PPF shows the production possibility of two goods in an…
Q: Carefully explain what is happening in the market. Indicate the impact if any on demand, supply,…
A: Given that the shrimp and chicken are substitutes. Substitute goods are goods that can be used or…
Q: Suppose the Fed acts to increase the non-borrowed monetary base. In the liquidity preference in the…
A: The monetary base, also known as base money, is the total amount of money created by the central…
Q: Where there are positive externalities from having a particular product in a society, the government…
A: Positive externality is the benefit enjoyed by society due to an economic activity in which they are…
Q: The single-price monopolist produces where price is marginal revenue curve. O a. less; less; below O…
A: A monopoly is a market structure in which there is only one producer or seller and a large number of…
Q: The production function is given by F(L) = 622/3. Suppose that the cost per unit of labor is $8 and…
A: A mathematical equation that describes the relationship between inputs (such as labor, capital, and…
Q: PRICE (Dollars p 10 6 4 2 0 0 M Statement 6 N -+- ++N 8 10 12 14 16 QUANTITY (Units) M → 18 20 Using…
A: The price elasticity of supply is calculated as the percentage change in quantity supplied divided…
Q: Aggregate Expenditures 800 600 400 200 0 15 04 Income Refer to the above graph to answer this…
A: Aggregate demand is the sum of consumption, investment, government spending and net export. This…
Q: Define elasticity of demand and discuss its type with the help of examples
A: The elasticity of demand refers to the responsiveness of the quantity demanded for a good or service…
Q: Use the diagram below to answer the questions that follow. Capitul (machine hour) A 10 30 10 Capital…
A: Suppose we have a production function that explains the relationship between the inputs {labor…
Please answer the correct Explain ASAP please a b c please answer fast please
Don't answer by pen paper please ASAP explain
Step by step
Solved in 5 steps with 4 images
- 1. This assignment further explores how demand and supply shocks effect the equilibrium price in a market. Imagine that the market for acoustic guitars is described by the following demand and supply curves: Qa = A - P Qs = B + SP a. Find the equilibrium price and quantity in the market. b. Form the inverse supply and demand functions and, Interpret the terms A and -B/8. f. Where A > 0, B 0. C. Explain why the emergence of a market for guitars requires the following: A> -B/8 > 0. d. Interpret the parameter & and, provide examples of when it is low or high. e. Suppose that master guitarist Julian Lage gives a performance that goes viral on YouTube. His amazing virtuosity sparks a massive increase in the demand for guitars. How would this shock be captured by the parameter A. Draw the supply and demand curves before and after the shock and show how the equilibrium changes. Based on your graph what, if anything, can you say about how the equilibrium price and quantity change? Now let's…What are the main factors affecting equilibrium in goods market (Demand and supply)? Explain both beneficial and adverse shocks.An adverse or negative supply shock causes the aggregate __________ curve to shift to the ______________. Select one: a. demand; left b. supply; left c. demand; right d. supply; right
- 1. Assume the U.S. economy has been operating at output levels beyond full employment. (a) Draw a correctly labeled graph of aggregate demand and aggregate supply and show each of the following. a. The long-run aggregate supply curve. b. The current equilibrium output and price levels, labeled and, respectively. (b) Assume that no policy action is taken. a. Show on your graph from part (a) the change in short-run aggregate supply that will return the economy to the natural rate of output. Explain why this happens. b. Label the new equilibrium output and price levels. (c) Monetory policy authorities will respond to the change in price level that occurred in part (b). How might the central bank respond to the change you described in part (b)? (d) Draw a correctly labeled graph of the money market. a. Label the equilibrium interest rate. b. Show on your graph the change in money supply that will occur due to the monetary policy described in part (c). c. Show on your graph the change in…11. Explain why the following statements are false. A.) “The aggregate-demand curve slopes downward because it is the horizontal sum of the demand curves for individual goods.” B.) “The long-run aggregate-supply curve is vertical because economic forces do not affect long-run aggregate supply.” C.) “If firms adjusted their prices every day, then the short-run aggregate-supply curve would be horizontal.” D.) “Whenever the economy enters a recession, its long-run aggregate-supply curve shifts to the left.”13. In recent months there have been lots of pent-up demand post lockdowns (e.g. many people who are flying for the first time since the lockdowns). supply bottlenecks that are preventing some items from being shipped to stores in a timely fashion. This definitely adds to the costs of resources (production). Now consider an aggregate demand/aggregate supply model with the x-axis showing real GDP and the y-axis showing the inflation rate. These events are going to cause shifts in both curves. What result can you definitely predict from the model? a. More unemployment b. Less unemployment c. More GDP d. Higher inflation rates
- 2. The economy is currently in the long-run macroeconomic equilibrium. a) Using an appropriately labelled graph, show the economy's current state. b) Suppose, the government decides to increase income taxes. What kind of policy did the government take? On the same diagram as a) show the effect of this policy in the short run and explain.Please answer all parts of the question! Thank you! 1. Answer each of the questions completely. Make sure your example clearly demonstrates your understanding of each concept. (a) Describe the four shifters of Aggregate Demand AND provide an example of each (____/2) (b)Describe the three shifters of Aggregate Supply AND provide an example of each (____/1) (c) What shifters the Long-Run Aggregate Supply Curve? (____/1) (d) Explain what an Inflationary (Positive Output) Gap and a Recessionary (Negative Output) Gap are, including what happens to unemployment and output (____/2)4. Carefully understand and analyze the following scenario. Mask mandates are lifted recently and consumers are optimistic in the current environment. What would be the short and long run impact of improved consumers’ confidence in coming months assuming the economic is in no gap situation currently?
- 9. The economy is currently in the long-run macroeconomic equilibrium. a) Using a graph, show the economy's current state. b) Suppose, the government decides to raise the military spending. Using an appropriately labelled diagram explain what will happen in the economy now. c) What policies can the government take that might bring the economy back to long-run macroeconomic equilibrium? Show and explain the effect of one such policy with an appropriately labelled diagram. d) If the government did not intervene to close this gap, would the economy return to long-run macroeconomic equilibrium? Explain and illustrate with an appropriately labelled diagram.2) Assume that the United States economy is currently in long-run equilibrium. a) Draw a correctly labeled graph of aggregate demand and aggregate supply and show each of the following. i. The long-run aggregate supply curve ii. The current equilibrium output and price levels, labeled as YE and PLE. b) Assume that the government increases spending on national defense without raising taxes. i. On your graph in part (a), show how the government action affects aggregate demand. ii. How will this government action affect the unemployment rate in the short run? Explain. c) Assume that the economy adjusts to a new long-run equilibrium after the increase in government spending. i. How will the short-run aggregate supply curve in the long-run equilibrium compare with that in the initial long-run equilibrium in part (a)? Explain. ii. On your graph in part (a), label the new long-run equilibrium price level as PL2.Question 28 Macroeconomists would suggest that an economy experiencing high unemployment should adopt policies to O reduce aggregate demand. O increase aggregate demand. O increase aggregate supply. O reduce aggregate supply.