Consider a good for which the per-period inverse- demand is p = v – Q. There are two periods and no discounting. There is an incumbent firm I that has marginal production cost c₁ < 1 in the first period. In the second period, its marginal production cost is C₂ = C₁ — λq₁, where q₁ is its output in the first period and λ € (0,2). 1-C₁
Q: 1 Instructions: In the table, enter your answers for consumption as a whole number. Round your…
A: GDP($Y)Consumption (GDP-S)SavingAPC(C/Y)APS(S/Y)MPC (Change in C/ Change in Y)MPS (Change in S/…
Q: Harmony is a South African mining company that exports 21 ounces of gold to the US. Gold is priced…
A: The expected value of one currency compared to another at a given point in the future is referred to…
Q: Telecommunication (broadband) in Singapore, comparing each film (Singtel vs M1 vs Starhub vs…
A: An oligopoly is a market structure in which a small number of dominant large firms control the…
Q: Considering the concept of elasticity of demand, which of the following items is likely to be the…
A: The elasticity of demand determines the responsiveness of quantity demanded to changes in price.…
Q: Amount (in dollars) Celto Money Public Cash Holdings $20,000 Checking Accounts Savings Accounts…
A: Money supply refers to the total amount of money available within an economy at a specific point in…
Q: The production function expressed in the table below represents the amount of hot dogs Hot Dog on a…
A: Marginal product refers to the additional output or production that is generated by using one…
Q: Problem 4 The following table shows the marginal costs for the next six years of a machine that your…
A: The EUAC metric is used to calculate the annual cost that, when the time value of money is taken…
Q: As you know, when Greece joined the euro area in 2001, its long-term interest rates converged with…
A: Interest rate basically refers to the amount of money that charged or given on a proportion of money…
Q: 1. Draw a labeled graph showing the supply and demand curves. Mark P₁ and Q₁ on your graph. Then…
A: Demand shows the inverse relationship between quantity demand and the price of the product. A demand…
Q: 20 0 0 1 2 3 4 5 8 6 7 QUANTITY (Hundreds of medium trucks) Suppose that SendIt is one of over a…
A: A competitive firm is one of many firms selling identical firms. The competitive firm is a price…
Q: Take the Solow model without technological change. Assume there is a government that taxes…
A: The Solow Growth Model is an exogenous economic growth model that represents increased capital…
Q: A change in technology that makes it more costly to produce tort
A: Technological change is important for industrial development. However, often there are situations…
Q: Inputs K, L, R and M cost £10, £6, £15 and £3 respectively per unit. What is the cheapest way of…
A: Since you have asked multiple questions, we will be solving only the first one. Please repost and…
Q: Labor (workers) 0 1 2 3 $1.05 $.95 $.42 TP (output) 0 $1.37 15 38 56 68 TC $16 $38 What is the…
A: Total cost refers to the total amount of cost involved in producing the goods and services. These…
Q: Suppose that Malika's only variable cost is labor. Assume that Malika faces daily fixed costs of $20…
A: Total cost is equal to the sum of total variable cost and total fixed cost. Total variable cost is…
Q: The demand function for Wally Winka's Neverending Lollipops is given by p = (8 - x)In(x + 6) where p…
A: To compute the price (p) when x = 4, we substitute the value of x into the given demand function:p =…
Q: Preference Shocks and Production Shocks. Suppose that firms and consumers co-exist in the static…
A: The optimum utility refers to the highest level of satisfaction or well-being that a consumer can…
Q: Consider the following table: GDP Depreciation Corporate earnings Transfer Payments Personal Tax…
A: National income, also called national output or national product, is the total value of products and…
Q: What is consumer surplus? Explain in words and by drawing supply and demand curves. What is producer…
A: It can be described as a number of products or any type of commodity that are supplied more than the…
Q: The Gulf Cartel and Sinaloa Cartel are the two major cartels in illegal drug trade in Mexico.…
A: Cartel is the group of firms that make decision of pricing and production collectively. They form…
Q: has an absolute advantage in the production of maize, and has an absolute advantage in the…
A: Production possibility frontier is an economic tool that is used to graphical represent the ability…
Q: A firm has two plants - one in Adelaide (A) and one in Brisbane (B). Let QA and QB denote the…
A: Production refers to the process of creating goods or services using various resources and inputs.…
Q: On the topic of international economic integration, explain the following concepts a. A Free…
A: Economic integration helps a country to specialize in the production of goods that yields the…
Q: To maintain its newly acquired equipment, the company needs P40,000 per year for the first five…
A: Cost for first 5 years=P40000 per yearCost for the next 5 years= P60000Additional cost at 5th year…
Q: Capitalized cost is an application of perpetuity. It is the sum of the first cost and the present…
A: Initial cost = P300000Replacement required at every 15 yearsAnnual maintenance cost = P5000Salvage…
Q: Suppose the imaginary company of Athena is a small, Rochester-based American apparel manufacturer…
A: Fixed costs refer to the costs of production that are not dependent on the output of a firm and…
Q: Let’s re-apply Figure 5.3 to illustrate the market for risky jobs. An innovation reduces the cost of…
A: Reservation wages are the lowest amount of remuneration or income that an individual is prepared to…
Q: Do you think that the taxicab industry in large cities would be subject to significant economies of…
A: Whether the Taxicab industry in large cities would be subject to significant economies of scale or…
Q: 1. Suppose that a representative individual has the following utility function U(x,y) = xy® The…
A:
Q: In spite of its early popularity, the Patient Protection And Affordable Care Act of 2010 (ACA) had…
A: The Patient Protection and Affordable Care Act (ACA), also known as Obamacare, is a comprehensive…
Q: Find the maximum profit that can be made and the corresponding number of suits and gowns that yield…
A: We have to find the maximum profit that can be made and the corresponding number of suits and gowns…
Q: about what goods should be produced by: tal factors of production needed to make unlimited resources…
A: It can be described as the most basic concept of economics whole economics depends on the basis of…
Q: Find Total Revenue as a function of p. (Hint: Do not attempt to find Total Revenue as a function of…
A: Total revenue is the total amount of money a business receives from selling its products or…
Q: On the diagram sample (a) show the effect of decrease in money demand (money supply is fixed) on…
A: The LM function represents all the money market equilibria. The diagrammatic representation of the…
Q: This table shows Zambia economic indicators from 1991-2021 time period. All variables are measured…
A: The average yearly rate at which the nation's total economic output expands or decreases is measured…
Q: Currentlyyouworkfor40hoursperweekatthewagerateof$20anhour.Your free hours are defined as the number…
A: The remuneration or payment that an employer gives to a worker for the work they have performed over…
Q: The macroeconomic research department of a large investment bank uses the arbitrage pricing theory…
A: The concept of expected return on the equity market refers to the anticipated average rate of return…
Q: What will be the break-even quantity, if the shop sold all the quantities what will be the profit or…
A: Break-even quantity is the quantity at which total costs and total revenue are equal.
Q: The following table shows the amount of good A and good B that two countries could produce if they…
A: Comparative Advantage: In the trade theory the country which have comparative advantage in…
Q: Consider the state space model. Suppose there are three states in the economy next year. Suppose the…
A: A state space model describes system's dynamics across time. It consists of state equations and…
Q: Exporting from the US Pros: transportation costs would be low. Since it would be produced locally,…
A: Analyzing the possible expenses and advantages associated with various solutions is known as C-B…
Q: Explain when Ricardian Equivalence fails. You can provide examples discussed in the class.
A: Ricardian Equivalence is an economic theory proposed by David Ricardo, suggesting that the method of…
Q: Please write this at least 1500 word. Must write this in 1500 word please and also provide the…
A: The International Monetary Fund (IMF) is an independent international organization and a cooperative…
Q: What is the Book value of an equepment purchased four years apo for$100,000, a sakage valuo…
A: The book value of equipment purchased four years ago for , with a salvage value of and an expected…
Q: Money as a factor of production. (This is adapted from Dorn busch and Frenkel 1973.) Consider the…
A: In a market economy, the production function demonstrates the causal relationship between supply…
Q: When examining GDP on a global scale, two issues become apparent. Is it conceivable to take these…
A: Two fundamental concerns occur when comparing GDPs.The underground economy and expense of living are…
Q: Question 2 (1 point) Listen Given the information in the following table for the economy of Albas: Y…
A: The consumption function denotes a formula through which the relationship between the income of a…
Q: Even in the US, approximately, what percent of medical care is purchased through insurance,…
A: Even in the US, approximately, what percent of medical care is purchased through insurance,…
Q: Which of the following is an example of a topic studied in macroeconomics? The costs of production…
A: Macroeconomics is a branch of economics that studies the behavior, performance, and structure of an…
Q: appraisal the political, economic, and social risks of Malaysia with respect to oil and gas…
A: The Asian economy distinguishes out due to its rapid progress, intellectual breakthroughs, and…
Step by step
Solved in 4 steps with 8 images
- A dairy farmer's milksolid production is sensitive to the use of barley when the output elasticity of barley is estimated to be 2.1. Select one: O True O FalseNo written by hand solution Suppose that headphones can be produced at a constant marginal cost. Headphone A is priced at $20 and headphone B is priced at $30. (a) If the Lerner index of headphone A divided by the Lerner index of headphone B is 0.5, what is the marginal cost of producing headphones? (b) Using your answer to part ‘a’, what is the elasticity of demand of headphone A? What is the elasticity of demand of headphone B?Wonopoly and natural resource prices Suppose that a firm is the sole owner of a stock of a natural resource. a. How should the analysis of the maximization of the discounted profits from selling this resource (Equation 17.63 be modified to take this fact into account? b. Suppose that the demand for the resource in question had a constant elasticity form q(t)=a[p(t)]b . How would this change the price dynamics shown in Equation 17.67? c. How would the answer to Problem 17.7 be changed if the entire crude oil supply were owned by a single firm?
- 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 MonoployAnswer the following: 1. Assuming that the product’s price is P58 per pack, should the competitor sell in the short-runWhy or why not?If it decides to sell, what will be the profit-maximizing (or loss-minimizing output per day)?What is the profit (or loss) that the seller can realize per day? What is the profit (or loss) per pack?A. Assuming that the product price is P42 per pack, answer the same questions in letter A.B. Because of increasing sellers of masks in the market, the product’s price further decreased to P32per pack. Again, answer the same questions in letter A.C. When is this seller going to shut down?D. Now generate the seller’s supply curve of mask in the short run.5- A manufacturer of doors, windows, and cabinets writes her yearly profit (in thousands of dollars) for each category in 248 a vector as: P= 319 632 40 30 Her fixed costs of production can be described by the vector:C- 60 What would her incomebif increasing it threefold would cause her profit to be fice times as arger 513,02 421; 623 427 72 907: 03 542 513,02 007;23 542 542: 3 007 421: 23 513
- A firm with market power sells its product in rre markets. The price in Market lis three times the price in Market 2 Assuming the firm faces the same constant mbrginal cost in each market and the price elasticity of demand in Market 1 is -1.2, the demand in Market 2 has an elasticity of -2. has an elasticity of -3.6. has an elasticity of-0.4. is less elastic than the demand in Market 1Question Four a) A fim, focusing on producing meat pie has a demand function 20 25-0.25P. If fixed cost is 145 and variable cost per urit function is 2Q- 40 + , where Q is number of meat pie produced and Pis the price per unit: i. 275 Determine the number of meat pies that maximizes the company's profit. ii. How much should the fimcharge per unit of the product? iii. Find the total profit at the profit mximizing level of output. iv. Using the own price edasticity of demand, comment on the fimis pricing policy optiors. b) The production function for Amzonbuưgers, producers of delicious burgers at Sao Tome, is given as: Q = K%L% If the wage rate is $15 per unit of labour, and cost of capital is $1,920 per unit and you have 1 unit of capital which carmot be changed, and the firmemploys 8 units of labour; i. Calculate the fimts total cost ii. Calculate the fim's average cost ii. Estimate the marginal product of labourPre-mixed concrete is an important input for the construction industry. Concrete cannotbe stored or transported over long distances as it begins to set after only a few hours. Forthis reason, only the three local firms—Aggregate Inc., Big Industries and ConCorp—arein a position to compete in the market. Moreover, the capital and regulatory requirementsfor constructing a new concrete plant are substantial, creating an effective barrier to entry.Pre-mixed concrete is regarded as a homogeneous good by the construction industry.Inverse demand in the market has been estimated to be,P = 600 −Q/50,where P represents the price of a cubic metre of concrete in dollars, and Q is the totalnumber of cubic metres of concrete supplied into the market on a given day.At present the three firms appear have identical production costs, with each firm facingfixed costs of $400,000 per day and a marginal cost of $180 per cubic metre.Big Industries and ConCorp estimate that the proposed merger would reduce…
- Q)Firm A and B are Cournot competitors, who produce good x. Both firms have zero cost and demand is X = 215 – P, where P is market clearing price. If firm produces 90 units, then what is the optimal amount of output for firm A to produce. solve our if you know correct and clearsolution.Consi der Hhe fallowing » The inverse femand function is givan by p= 30-@ Cournet medel. where Q = E,+ * Firm 13 marginal cost is $6lei=6). Fivm 2 uses a nem techaulagy There is no that it's marginal cost is $3 (6=3). fixed cort So The fwo fims chooce thair and Compete only Jame). Answer the follming puestions. O Derive Firm 1 amd Firm 2% vation furtions reupertivaly. o Solve Hhe Harh equilibrium ( ", q") O What is He equilibrinm level for eah firm. quenti tias simultaneculy (So it's a one- shot simultaneaus once price and what is Hhe profit Suppore there is Iim 2. Wlhat is the highert price that Firm I is willing to paj for this new o Mow let's chauge the setup from Coumet campetition to Bertrand Competitin, while maintaining all efther aJAump tins. What is He equilibium price? O Suppon the fwe finms engage in Betrand (ompetition What is the hijhut price that Fim 1 o milling for He new feihnly? * market for the teihue lagy uped by toSystems applicationSolve and analyze the following problems. Make sure all the steps are properly justified. Correctly use mathematical notation or terminology. Interpret the solution in the context of the problem.Suppose the supply and demand equations for printed shirts for a graduating class are given byp = 0.7q + 3p = -1.7q +15where p is the price in dollars and q is the quantity in hundreds.Determine supply and demand if the shirts cost $ 9.00. Analyze and discuss the stability of the shirt market at this price level. Prepare the graph of the two equations in the same coordinate system and identify the equilibrium point, the supply curve, and the demand curve.