a) i)Explain difference between; ii,Microeconomics and macroeconomics iiiPositive and Normative economics b) Given the following demand and supply functions as; i)Find the price elasticity of demand and price elasticity of supply at the equilibrium point. ii)Based on the values obtained from Price elasticity of supply in (i) above, what advice would you give to the producer if he is to increase revenue? iv)Using illustrations, distinguish between Minimum and maximum price v)Assuming the government, set the price at 45shs, determine whether its minimum or maximum price, and state the surplus or deficit
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a) i)Explain difference between;
ii,
iiiPositive and Normative economics
b) Given the following
i)Find the
ii)Based on the values obtained from Price elasticity of supply in (i) above, what advice would you give to the producer if he is to increase revenue?
iv)Using illustrations, distinguish between Minimum and maximum price
v)Assuming the government, set the price at 45shs, determine whether its minimum or maximum price, and state the surplus or deficit
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- 1.You have been recently employed as a consultant for a company that produces laptops in Ghana. Suppose the research department of the company have estimated the demand and supply curves of laptops and they are:2Qd + 0.5P − 24 = 0and 4Qs − 2P + 6 = 0You are to use this information toa. Determine the equilibrium level of prices and quantity demand.b. Represent your answer graphically and determine the welfare of economic agents.c. Suppose the government imposes a tax of ¢4 on every laptop sold, determine the new equilibrium price and quantity.d. Represent the new supply curve, old supply curve and the demand curve on a graph showing all equilibria.e. Show how the economic agents share the tax.f. What is the amount of government tax revenue?Demand, Supply, and Market Equilibrium - Think of a product that you have purchased recently (e.g. soda, diapers, takeout meals, milk, shoes, manicure/pedicure, video game, etc...). Explain how the law of demand affected your purchase. Give specific examples of how the determinants of demand and supply affect this product (T-I-P-E-N and P-R-E-S-T). What happens to the demand curve and the supply curve when any of these determinants change? What would cause a change in demand versus a movement along the same demand curve for this product? How would you determine the new equilibrium price and quantity that result from these changes? Can you demonstrate some of these changes graphically? Price Elasticity of Demand - Consider a product that you have purchased recently. If the price of this item increases, how would you adjust your purchases? Is the Demand for this product Price Elastic or Price Inelastic? Justify your classification by applying the determinants of elasticity to…Suppose government has been able to reduce the level of tobacco consumption in the country through a social campaign. a) Properly labeling the axes, draw a figure showing the current supply of and demand for tobacco and equilibrium price and quantity demanded and supplied. b) Provide a brief explanation about new equilibrium price
- This problem involves solving demand and supply equations together to determine price and quantity. a. Consider a demand curve of the form QD=-2P+20, where QD is the quantity demanded of a good and P is the price of the good. Graph this demand curve. Also draw a graph of the supply curve Qs =2P-4, where Qs is the quantity supplied. Be sure to put P on the vertical axis and Q on the horizontal axis. Assume that all the Qs and Ps are nonnegative for parts a, b, and c. At what values of P and Q do these curves intersect-that is, where does QD = Qs ? b. Now, suppose at each price that individuals demand four more units of output-that the demand curve shifts to QD - 2P+24. Graph this new demand curve. At what values of P and Q does the new demand curve intersect the old supply curve-that is, where does QD = Qs ? c. Now finally, suppose the supply curve shifts to Q's=2P-8. Graph this new supply curve. At what values of P and Q does QD=Q's? Show all working calculations and label garph with…3)What is the relationship between a demand schedule and a demand curve? * a)A demand schedule shows the various quantities of the good demanded, while a demand curve shows the various prices. b)A demand schedule is a numerical tabulation of the quantity demanded of a good at different prices, while a demand curve is a graphical representation of the law of demand. c)A demand curve shows the various quantities of the good demanded, while a demand schedule shows the various prices. d)A demand curve is a numerical tabulation of the quantity demanded of a good at different prices, while a demand schedule is a graphical representation of the law of demand.6. The Market for Chicken Meat in Davao City a. Fill in the missing algebraic signs ( + or -) of the demand and supply equations for chicken meat below according to the hypothesized direction of relationships. where: Q= quantity of chicken meat in kilograms, per day Pc = price of chicken meat (in pesos per kilogram) 1= income of average consumer (in pesos per day) P=price of beef (in pesos per kilogram) W=wage rate paid in the poultry business (in pesos per day) P,= price of mixed feeds (in pesos per kilogram) Demand: Q = 20. Supply: Q = - 20 1.5P 4.5Pc _0.8 I _0.5 W _0.6 Ps 3 PF b. Suppose the other variable affecting the demand for and supply of chicken meat have the following values: I = P300/day; Pa = P100/kg; W = P100/day; Pr = P10/kg i. Derive the simple demand and supply equations where Q is a function of P. ii. Solve for the equilibrium price and quantity in the market. iii. Suppose the government imposes a price ceiling of P50/kg: 1. What happens to the market for chicken? 2.…
- Help pleaseWhat are the potential effects in the market for a college education if the number of colleges offering degrees increases. a) draw a supply/demand graph of the market for college education. b) indicate starting equilibrium price and equilibrium quantity. c) Analyze graphically the effect of the change given above on equilibrium price and equilibrium quantity in the automobile market.I. For the normal good, make a (Hypothetical) linear demand schedule with 7 different price points and corresponding quantity demanded for your own household. For the same normal good, make another (Hypothetical) linear demand schedule with 7 different price points and corresponding quantity demanded for your neighbor. Assuming that you and your neighbor are the only two households in the market, make a market demand schedule for the same normal good. Draw and interpret a graph to show the market demand and impact of changes in quantity demanded, if price of the same normal good decreases.
- (d) Consider the following demand-supply model: P =15−Qd; P =3+Qs Use the equilibrium condition Qd=Qs=Q, and find the equilibrium price and quantity. Show this equilibrium in a graph. (e) What are definitional, behavioral, and conditional equations? Give examples.Draw a demand curve and a supply curve for one of your favourite goods and explain why the point of intersection for demand and supply gives the equilibrium.also illustrate diagrammatically what happens to the equilibrium price and quantity in this market as a result of a decrease in all consumers’ income. Here you have to consider: Whether a change in all consumers’ income has an effect on the demand or the supply side of the market. How to establish the direction of the change (increase or decrease?) How to deduce the impact on the equilibrium. Go back to the original equilibrium; to the point before the consumer income decrease. Now, consider that the market is flooded by new firms wanting to produce the good. Draw this change—again, consider the three points mentioned above. Finally, let’s put the two things together. What happens if you simultaneously decrease income and increase the number of firms involved in the market in terms of the new equilibrium price and quantity? Hint:…In which statement(s) is "demand" used correctly? (I) "An increase in the price of hot dogs will reduce the demand for hot dogs." (II) "An increase in the price of hot dogs will reduce the demand for hot dog buns (a complement good)." in both statements I and II in statement I only in statement II only O in neither statements I nor II