. Draw a circular-flow diagram. Identify the parts of the model that correspond to the flow of goods and services and the flow of dollars for each of the following activities.

Paul purchases a pair of shoes for $30

Shannon receives a salary of $1,500 per week at the supermarket which she works

Honda Limited receives $20,000 for the sale of a sports utility vehicle

Mark earns $2,000 from his 15 percent ownership of Apple stock

Classify each of the following statements as positive or normative. Explain.

Bahamas faces a trade-off between inflation and unemployment

The ECCB should reduce the interest rates

St. Lucia ought to provide a pension for all citizens. 4.Higher tax rates discourage savings and working

Show in a diagram the effect on the demand curve, the supply curve, the equilibrium price, and the equilibrium quantity of each of the following scenarios.

The market for gasoline

Scenario 1: Electric cars have increased in popularity.

Scenario 2: The price of sports utility vehicles rises.

The market for the cardigans

Scenario 1: New knitting machines are invented.

Scenario 2: A caterpillar infestation destroys most of the cotton crop in Barbados

The market for shrimp

Scenario 1: More people become health conscious and realize the high cholesterol content of seafood.

Scenario 2: The price of fishing bait has decreased

Following your review of elasticity, will the elasticity of demand for Nissan sedans increase, decrease, or remain the same when each of the following events occurs? Explain your answer.

Other car manufacturers, such as Honda, decide to make and sell sedans.

Sedans produced in foreign countries are banned from the European market.

Following increased advertisements, Americans believe that sedans are less safe than ordinary passenger cars.

In the long run, new sedan models are produced.

Jordan usually pays a price between $14 and $20 per kilogram of sugar. His monthly total expenditure on sugar increases as the price decreases. What does this imply about her price elasticity of demand for sugar?

Using the table below calculate the cross price elasticity skirts. Are these goods substitute or complement? Briefly explain.

Price of Sandals

Price of Skirts

Quantity demanded of Sandals

Quantity demanded of Skirts

$5

$4

60

100

$4

$2

80

71

The demand for pizza is given by Qp= 85 − 0.4P where Qp is the quantity demanded in slices and P is the price per slice. The supply of pizza is given by Qs= 55 + 0.6p.

Calculate the equilibrium price and equilibrium quantity of pizza

Calculate the demand and supply for pizza if the market price is $15 per slice. What problem exists in the economy? What would you expect to happen to price?

As more people buy televisions, the demand for Netflix increases and the price of Netflix decreases. The fall in the price of Netflix decreases the supply of Netflix. Explain what is wrong with this statement

Butter and toast are often consumed together. Both the equilibrium price of toast and the equilibrium quantity of butter have risen. What could be responsible for this pattern—a fall in the price of milk or a fall in the price of flour? Illustrate and explain your answer.

Suppose instead that the equilibrium price of toast has risen but the equilibrium quantity of butter has fallen. What could be responsible for this pattern—a rise in the price of milk or a rise in the price of flour? Illustrate and explain your answer

The demand for sneakers is given by: P=48+3Q

What is the elasticity in moving from a quantity of 55 to a quantity of 66?

Are sneakers elastic, unitary elastic, or inelastic in this price range? Explain

If the price of sneakers were to increase by 15 percent, what would be the percentage change in the quantity demanded?

What happens to total revenue for sneaker sellers when the price of sneakers increases? Explain your answer.

Question

. Draw a circular-flow diagram. Identify the parts of the model that correspond to the flow of goods and services and the flow of dollars for each of the following activities.

Paul purchases a pair of shoes for $30
Shannon receives a salary of $1,500 per week at the supermarket which she works
Honda Limited receives $20,000 for the sale of a sports utility vehicle
Mark earns $2,000 from his 15 percent ownership of Apple stock

Classify each of the following statements as positive or normative. Explain.

Bahamas faces a trade-off between inflation and unemployment
The ECCB should reduce the interest rates
St. Lucia ought to provide a pension for all citizens. 4.Higher tax rates discourage savings and working

Show in a diagram the effect on the demand curve, the supply curve, the equilibrium price, and the equilibrium quantity of each of the following scenarios.

The market for gasoline
Scenario 1: Electric cars have increased in popularity.
Scenario 2: The price of sports utility vehicles rises.

The market for the cardigans
Scenario 1: New knitting machines are invented.
Scenario 2: A caterpillar infestation destroys most of the cotton crop in Barbados

The market for shrimp
Scenario 1: More people become health conscious and realize the high cholesterol content of seafood.
Scenario 2: The price of fishing bait has decreased

Following your review of elasticity, will the elasticity of demand for Nissan sedans increase, decrease, or remain the same when each of the following events occurs? Explain your answer.

Other car manufacturers, such as Honda, decide to make and sell sedans.

Sedans produced in foreign countries are banned from the European market.
Following increased advertisements, Americans believe that sedans are less safe than ordinary passenger cars.
In the long run, new sedan models are produced.
Jordan usually pays a price between $14 and $20 per kilogram of sugar. His monthly total expenditure on sugar increases as the price decreases. What does this imply about her price elasticity of demand for sugar?
Using the table below calculate the cross price elasticity skirts. Are these goods substitute or complement? Briefly explain.

Price of Sandals	Price of Skirts	Quantity demanded of Sandals	Quantity demanded of Skirts
$5	$4	60	100
$4	$2	80	71

The demand for pizza is given by Qp= 85 − 0.4P where Qp is the quantity demanded in slices and P is the price per slice. The supply of pizza is given by Qs= 55 + 0.6p.
Calculate the equilibrium price and equilibrium quantity of pizza
Calculate the demand and supply for pizza if the market price is $15 per slice. What problem exists in the economy? What would you expect to happen to price?
As more people buy televisions, the demand for Netflix increases and the price of Netflix decreases. The fall in the price of Netflix decreases the supply of Netflix. Explain what is wrong with this statement
Butter and toast are often consumed together. Both the equilibrium price of toast and the equilibrium quantity of butter have risen. What could be responsible for this pattern—a fall in the price of milk or a fall in the price of flour? Illustrate and explain your answer.
Suppose instead that the equilibrium price of toast has risen but the equilibrium quantity of butter has fallen. What could be responsible for this pattern—a rise in the price of milk or a rise in the price of flour? Illustrate and explain your answer
The demand for sneakers is given by: P=48+3Q
What is the elasticity in moving from a quantity of 55 to a quantity of 66?
Are sneakers elastic, unitary elastic, or inelastic in this price range? Explain
If the price of sneakers were to increase by 15 percent, what would be the percentage change in the quantity demanded?
What happens to total revenue for sneaker sellers when the price of sneakers increases? Explain your answer.

Accepted Answer

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