Consider the Walrasian demands x*(p, I) and x*(p', I) where p' is a price vector where the price of good i increased relative to p and all other prices stayed the same. Let T E denote the total effect on the demand for good i in response to the price increase, that is the change from xi*(p, I) to xi*(p', I). We know that T E can be decomposed into two effects the substitution effect (SE) and the income effect (IE). Are the following necessarily true (i.e, answer True if the expression is always true for every possible demand function, and False if there is some demand function such that the expression if false):  1. T E < 0 2. If SE < 0 then IE < 0 3. If SE < 0 then T E < 0 4. If T E < 0 then IE < 0 5. If IE < 0 then T E < 0

Suppose the government of the island has decided to give consumers a more attractive price for tomatoes by imposing a fixed, per unit subsidy.    Thus, start with the original demand (Qd = 450 - 100P) and supply (Qs = 50P) and analyze this new intervention, the subsidy. The subsidy works like this: each tomato seller receives a 3-dollar refund for each kilogram of tomatoes sold.    Write down the equation for the new "effective supply" curve. Determine the new equilibrium quantity and equilibrium price. What is the price that the consumers will pay for their tomatoes? What is the price that the producers will effectively earn for their tomatoes, inclusive of the subsidy? How much will the government spend on tomato subsidies in this case in total? (Recall the units of measurement: P is the price in dollars per kilogram of tomatoes; and Q is the quantity of tomatoes, expressed in thousands of kilograms.) Graphically depict the new equilibrium complete with (solved) values for the new…

a) Due to Covid-19, meatpackers are facing substantially higher costs and people are panic buying meat. As a result, we can expect (at least temporarily) Lower prices and no change in quantity Higher prices and an uncertain change in quantity Higher prices and a certain increase in quantity Higher prices and a certain decrease in quantity   b)  If, against the request of the US, Saudi Arabia decides to further increase the supply of crude oil to the world market, we would expect as a result that (all else equal) the   Equilibrium price of crude oil will decrease, and the equilibrium quantity will increase Equilibrium price of crude oil will increase, and the equilibrium quantity will decrease Equilibrium price and quantity of crude oil will increase Equilibrium price and quantity of crude oil will decrease

Charles is a volunteer fire fighter living in San Diego who works as a caddy to supplement their normal income. At an hourly wage rate of $40, they are willing to caddy 1 hours per week. Upping the wage to $65 per hour, they are willing to caddy 4 hours per week. Using the midpoint method, the elasticity of Charles's labor supply between the wages of $40 and $65 per hour is approximately means that Charles's supply of labor over this wage range is which