If there are no externalities or market power and all markets are in equilibrium, what conclusions can we draw from this in economic theory?

Q: . Which of the following would not give us a measure of GDP? a) The aggregate value of all incomes…

A: GDP is the production of goods and services during an accounting or financial year.

Q: The AB line in the below graph represents a worker's budget constraint (AB line). A utility-…

A: Consumption: It refers to goods and services that people purchase. With more purchases in the…

Q: The hourly operating cost of a plane which seats up to 405 passengers is estimated to be $5,328. If…

A:

Q: 5. Consider the cost function for a firm with the production function from above, F(K, L) = K0.5 +…

A: We need to find whether this production function exhibits decreasing, decreasing, or constant…

Q: What is the future worth of these payments for 16 years if interest is 9% in the first year and…

A: The future value if the compounding is done annually is:  FV = P (1 + R)t R : Interest rate PA…

Q: The business cycle will alternate, if two or more of the components of aggregate demand decrease or…

A: The business cycle alludes to a withdrawal and extension of inflation, GDP, and joblessness. It…

Q: What activity is not included in the GDP? Emily cooked some soup for the customers in the restaurant…

A: The abbreviation "GDP" refers to the "Gross Domestic Product," which is the total monetary value of…

Q: Provide answers in the form of a percentage to three decimal places . (a).What is the effective…

A:

Q: What is a strategy that will hedge this Sri Lankan firm's exchange rate risk? A. Go short in 36…

A: Exchange rate risk refers to the risk that a company's operations and profitability may be affected…

Q: 5. What is the efficient rental rate in this market (S/apt.)? 6. What is the efficient rental…

A: The forces of demand and supply as represented by demand and supply curves respectively can be used…

Q: QUESTION 1 All of the following are categories of economic resources except: O Land O Interest rate…

A: Economic resources: the inputs used for producing and distributing goods and services.

Q: Entrepreneur's forgone interest on personal funds used to finance the Creamy Crisp A. has lower…

A: An economic profit is the difference between the revenue a commercial entity has received from its…

Q: Examine how surpluses and deficits in the balance of payments (BOP) affect exchange rates.

A: Introduction - All central bank transactions are recorded in the account on the balance of payments…

Q: There will be a wage. of workers when the wage is the equilibrium

A: In the labour market, the equilibrium wage rate is determined by the intersection of the labour…

Q: f the consumption function is C = C (Y - T) = 0.75 (Y - T) and there is an increase in output of 200…

A: Given  Consumption function: C=0.75(Y-T)              ..... (1) Increase in output =200 million…

Q: Consider a utility function given by u(x, y) = (ax² + by). It is called CES utility function.

A: Given utility function   u(x,y)=axρ+byρ1ρGiven utility function is known as CES production…

Q: Brief description of a named economic crisis e.g., 2007 to 2010 financial crisis.

A: Financial crisis affects the entire economy. Finance is considered foremost part of economy. Crisis…

Q: The socially optimal level of emissions of most pollutants is zero. Select

A: Marginal Social Cost and Marginal Social Benefit: The addition in the total social cost when one…

Q: For the next three questions, conside closed economy with the following information: • Economic…

A: GDP is the market value of goods and services produced within an economy in a given period of time.

Q: SRA S₁ *** P₁ AD₂ P₂ AD₁ Y P 0 P₂ 0 LRAS, Y, Y₂ Panel (a) Y, Y, Panel (c) SRA S₁ AD, P SRA S₂ 0 P…

A:

Q: In what way do the import and export documents play an important role in ensuring that the…

A:

Q: Q2. You are choosing between two-goods, X and Y, and your marginal utility from each is as shown in…

A: A consumer is said to maximize its utility for two or more goods when the last penny spent on all…

Q: 65

A: When talking about the traditional Price-Specie-Flow mechanism, it explains the stabilizing…

Q: Better Corporation can purchase a piece of equipment now for $120,000 or buy it 4 years from now for…

A: The Nominal Interest rate alludes to the interest rate without changing inflation.

Q: What is a supply shock and why might it lead to stagflation? Explain & Provide an example using an…

A: A sudden unexpected increase or decrease in the supply of goods, commodity or services is termed as…

Q: 16Q and MC = 4Q.) a. What level of Q maximizes net benefits - (profits)? b. What is the maximum…

A: Net Benefit is determined by summing all benefits and subtracting the sum of all costs of a project.…

Q: A job is a contract between a and a A. bank; household; capital B. manufacturer; retailer;…

A:

Q: Is that real GDP is 280 and the price index is 110 calculate the nominal GDP?

A: Real Gross domestic product is known to be as the value which is actually given in a constant prices…

Q: A consulting engineering firm is considering two models of SUVs for the company principals. A GM…

A: The annual worth is the sum of all the advantages and expenses over the course of a year. We…

Q: Bob's lawn-mowing service is a profit-maximizing, competitive firm. Bob mows lawns for $30 each. His…

A: In the short run at least one input is fixed whereas in the long run there is no fixed cost.

Q: Assets Vault Cash Deposits at the Federal Reserve Loans Reference Ref 12-1 This bank's reserve ratio…

A: Reserve Ratio, Otherwise called Cash Reserve Ratio, it is the level of stores which business banks…

Q: c. If the central bank conducts the same policy as in part (b), except chartered banks hold all of…

A: Money multiplier is a term in monetary economics that is a phenomenon of creating money in the…

Q: Refer the figure given below to answer the question. Wage rate ($ per hour) 9 8 7 6 5 4 3 2 1 0 S₁ D…

A: If a person is not employed but is looking for work and is available for it, they are said to be…

Q: Demand for good X is perfectly elastic. Currently, the price of good X is $5 and quantity demanded…

A: Elasticity is the concept used by economists to measure the responsiveness of supply/demand to…

Q: Bank of Detroit has checkable deposits at $865, reserves worth $82 and loans at $783. A new customer…

A: Checkable deposits = $865 Reserves = $82 Loans = $783  Additional checkable deposits = $150…

Q: 32

A: In a market, products and services are consumed by the households and households sometimes…

Q: If a labor union successfully restricts the supply of labor to firms, and if the union is not able…

A: According to law of Demand for Labor markets - Whne wages are higher, quantity denand for labour is…

Q: ii) Monetary policy in a liquidity trap. Suppose the money demand is given by: M = $Y (0.25-i) as…

A:

Q: A new coffee shop opens and to maximize profit it hires 5 workers at the competitive wage rate. The…

A: The value of marginal product is the marginal product multiplied by the product price.  VMP=MP×P If…

Q: Two sport utility vehicles (SUVS) are being considered by a recent engineering graduate. Using the…

A: Considering the given values, we build the following table giving the weights to each attribute…

Q: Again, please consider the following information, related to Economy Alpha. Economy Alpha contains…

A: Bank reserves are the cash essentials that monetary organizations should have close by to meet…

Q: A man borrowed P 100,000 and promised to pay after 5 months at an interest of 8% compounded monthly…

A: I = P(1+ R12)m - P Where I : the compund interestP : The principle amountR : Compound interest rate…

Q: Engr. Aisa has a 15 year-term plan. He is planning to make a P 10,000 deposit 2 years from now, P…

A: Given that, Aisa has a 15-year-term plan make deposit P 10,000 deposit 2 years from now, P 8,000 in…

Q: Incomes in China and India are a small fraction of incomes in the United States. But incomes in…

A: The Lorenz curve is a graphical portrayal of the dispersion of income or abundance in the general…

Q: The price-demand equation and the cost function for the production of active styluses are given,…

A: total cost is defined as the sum of all the expenses incurred by the producer to produce goods.

Q: The annual worth for years 1 through infinity of $50,000 now, $10,000 per year in years 1  through…

A: Annual worth: The yearly worth is the net of the relative multitude of advantages and costs caused…

Q: 25 of 100 A firm in a perfectly competitive market is making a loss when it produces the quantity…

A: in perfect competitive market, there are many number of sellers and buyers which turns the market…

Q: Discussion Question 13-2 Answer the following questions, which relate to measures of concentration:…

A: Four-firm concentration ratio helps to understand the contribution of firms in the overall output…

Q: Robots on the farm Commercial farms of the future may be staffed by robots that will identify,…

A: The value of marginal product is marginal product multiplied by the labour product. VMP = MP×P The…

Q: QUESTION 10 Consider the markets studied in class: Bertrand duopoly, Cournot duopoly and Monopoly.…

A: Bertrand competition is a model of competition in which two or more firms produce a homogenous good…

Market Failure Analysis

To understand Market failure, we need to first understand welfare economics. An Italian economist, Vilfredo Pareto stated that allocation of resources in an efficient manner such that an economic change, which harms no one and makes someone better off, indicates an increase in social welfare. It is also called Pareto Optimality, where resources cannot further be reallocated without harming one. This does not apply to those economic changes, which harm some and benefit others. social welfare increases if the utility of any of its members' increases and none decrease in the economy.