Explain and critically appraise Alfred Marshall’s theory for deriving demand functions and supply functions for commodities (‘two blades of the scissors’) based on his method of partial equilibrium.
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Explain and critically appraise Alfred Marshall’s theory for deriving
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- Find the equilibrium point for the supply and demand functions below. Enter your answer as an ordered pair. S(x)=4x+6D(x)=48−3xConsider the markets for beef (B) and lamb (M), where the demand curves are Q = 20 – 2PM + Ps and Q = 60 – 6PB + 4 PM and the supply curves are QM = 2PM and QB = 3P8. a) Find the equilibrium prices and quantities for beef and lamb. b) Suppose that an increase in the price of chicken shifts the supply curve of lamb to QM = PM. How does this change affect the equilibrium prices and quantities for beef and lamb? Using words and graphs, explain why a shift in the supply curve for lamb would change the price of beef.If cars and gas are complements both sold in competitive markets, and the supply of gas falls, then according to a general equilibrium analysis: Group of answer choices The quantity of cars sold will rise The price of cars will fall The price of cars will rise The price of cars will stay the same
- Discuss what is Market Pricing and identify all salient factors of market pricing on economic decision-making.Consider two substitute products; movies and Box Office rentals. With the aid of graphical illustrations, explain why the outcome of a general equilibrium analysis can differ substantially from that of a partial equilibrium analysis, when evaluating the impact of a unit tax on movie tickets.Difference between the Partial equilibrium Approach and the general equilibrium Approach? Show their relationship with Equilibrium Price?
- Find the general market equilibrium for two goods whose supply and demand curves are given below:During 2009, incomes fell sharply due to the financial crisis of 2008-2009. This change likely led to a decrease in the prices of both normal and inferior goods. If both coffee and tea are normal goods and the price of coffee increases, it will increase the demand for tea. If the price of lemonade decreases due to insufficient demand, and its supply decreases at the same time, the equilibrium price will clearly rise.Carol and Bob both consume the same goods in an economy of pure exchange. Carol is initially endowed with 9 units of good 1 and 6 units of good 2. Bob is initially endowed with 18 units of good 1 and 3 units of good 2. They both have the utility function U(x₁, x₂) = = $1), what will the equilibrium price of x1/³x/3. If we set good 1 as the numeraire (so that p₁ good 2 be?
- Remy and Emile consume only blueberries (x,) and raspberries (x,). Remy has utility function UR = x (x5)² and Emile has utility function UE = (xf)²x. Remy is endowed with 5 blueberries and 5 raspberries and Emile is endowed with 10 blueberries and 10 raspberries. (a) Derive the equation of the contract curve, i.e., find x%(xf). (b) Set x2 as the numeraire, i.e., assume p, = p and p2 = 1. Find the competitive equilibrium – the equilibrium price ratio, P1/P2, and the equilibrium allocation, ((xf, x5), (xf,x£ )).Greg, Rob and Soroush all have different demands for coffee. Greg’s demand is given by Qg = 6 − P. Rob’s demand is given by Qr = 8 − 2P. Soroush’s demand is given by Qs = 6 − 1 2 P. (a) Derive the market demand curve for coffee. (b) Graph the market demand curve with an emphasis on the kinks.Q.4 (a)Define fully a general competitive equilibrium. What are the essential economic and mathematical elements of the proof of the existence of general equilibrium? Enumerate them and explain how an absence of/or any violation in their requirements will affect the outcome in respect of the existence of general equilibrium?