OPTION 2: The Cheesiest: Consider a competitive market for cheese, with two producers and four consumers. Neither firm has any fixed costs. The table shows marginal production costs and marginal values for various customers. Firm 1 MC 2 4 6 8 Firm 2 MC 1 4 7 10 Unit 1 2 3 4 MV 1 10 8 6 4 1. Sketch the situation using a demand and supply framework. MV 2 12 2 MV 3 11 9 7 5 MV 4 4 3 2 1
Q: P For each of the following products a change in demand (A D) or a change in quantity demanded (A…
A: The link between the amount of a product provided and its price, while maintaining other variables…
Q: The US government increases the tax on steel imported from China. Such taxes exemplify a(n) O…
A: The question includes understanding the economic idea of tariffs, which are charges forced by an…
Q: . Consider the supply and demand diagram below. $ 20 15 a
A: A price floor is a government-imposed lower limit on the price of a particular good or service. The…
Q: a) What is Quantity of cars TC $500,000 540,000 560,000 570,000 590,000 620,000 660,000 720,000…
A: The total sum that a producer must pay to create all of their goods and services is referred to as…
Q: ATC, AAC, AVC, MC ( 270.00 24000 210.00 180.00 150.00 120 00 90.00 6000 30:00 000 Unit Cost Curves…
A: Perfect competition is a theoretical market structure in which there are so many firms selling…
Q: Suppose that there is a civil case against a defendant. The probability of the plaintiff winning is…
A: In an American-style legal fee structure, increasing each party's predicted net gain—which is…
Q: The inverse demand for Harley Davidson motorcycles is given by: P= 40,000-100 where P is the price…
A: Harley Davidson is a monopoly. The demand function is P = 40,000 - 10QThe marginal cost is constant…
Q: A drug company produces a new drug to treat baldness. The inverse demand curve for the drug is P =…
A: Marginal cost represents the change in total production cost that arises when the quantity produced…
Q: Figure: Aggregate Demand and Aggregate Supply 1 Inflation rate 10 9 8 7 6 5 4 3 2 1 0 0 A. B. 1 O c.…
A: The total supply of goods and services produced in an economy within an aspect time period is called…
Q: Case: A beekeeper lives adjacent to an apple orchard. • The orchard owner benefits from the bees…
A: Business economics is the study and analysis of commercial challenges affecting businesses using…
Q: Suppose the consumer's utility function is given by U(x,y) = X3/5y2/5, and the exogenous variables…
A: Utility function represents the relationship between utility and consumption of goods. The change in…
Q: how does the theory of the firm differ from short term profit - maximisation? why is the former…
A: The theory of the firm and short-term profit maximization are related concepts in economics, but…
Q: 34) Consider Dianna who has a $25 fast food budget per month. She can purchase salads (S),…
A: The marginal utility table is given below SaladsMU SaladsMU/P SaladsHamburgersMU HamburgersMU/P…
Q: Explain how fluctuations of the EUR/ZAR exchange rates would have an impact on South Africa. Justify…
A: The worldwide currency market, commonly referred to as the foreign exchange or FX market, operates…
Q: What will be the Trade balance if the Exports are 280888 and the Imports are 1799002.
A: Trade Balance is an generally and merely an alternative economic model to free value of the trade…
Q: The maintenance cost for furnaces will be $100,000 per year for 2 years, then changed to $120,000…
A: Cash flow:The net amount of cash or cash equivalents that enters and exits a business or financial…
Q: Please answer this part 2 of the question, it is relating to the first one.
A: Balanced budget is one kind of plan in which the revenue of a company or firm is equal to their…
Q: Consider a closed economy, where wages are sticky in the short run. The consumption function is C =…
A: Aggregate supply means the total quantity of finished goods and services that all the producers are…
Q: QUESTION 7 If the Federal Reserve System buys government securities, bank reserves will decline.…
A: The Federal Reserve System, often referred to as the Fed, is the central banking system of the…
Q: Suppose that identical duopoly firms have constant marginal costs of $10 per unit. Firm 1 faces a…
A: The Bertrand model of oligopoly is a non-collusive oligopoly model that has two or more firms…
Q: Hey could you answer question 2b, I am having trouble with it
A: Household Optimization Problem: The household maximizes utility Uti subject to the budget…
Q: As a result of loan write-offs, Bank A has to be liquidated by the regulators. The book value of the…
A: FDIC, a Federal Deposit Insurance corporation is a corporation created in America to protect…
Q: why is time expense equal to wht(1-z) - what does the income have to do with how much the time cost?
A: Let's start by outlining the optimization problem for the household. Within the constraints of its…
Q: What is the difference between the balance of trade and the balance of payments? Multiple Choice The…
A: The balance of payments (BOP) refers to a systematic record of all the economic transactions that is…
Q: Given the following supply, demand and marginal revenue fi QS = 5P-25 Q = 100-5P MR = 20-2/5Q (a)…
A: Competitive equilibrium occurs when demand and supply forces are equal. Firms are price taker in…
Q: Determine the rate of return per year for the cash flow series shown below. Year Cash Flow, $ 1 2 3…
A: Cash flow:The net amount of cash or cash equivalents that enters and exits a business or financial…
Q: You have the opportunity to get a VEGGIE Café franchise (this specializes in BOCA veggie Burgers and…
A: Explicit costs are the actual out of the pocket expenses which are associated with the overall…
Q: A company finds that the rate at which the quantity of a product that consumers demand changes with…
A: The demand function is a mathematical representation that describes the relationship between the…
Q: Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount…
A: In economics, bonds are fixed-income instruments which represent the loans made by investors to…
Q: Show in a graph a market where there is simultaneously a positive and a negative externality. Give…
A: An externality is an external benefit or external cost that is imposed on a third party (who is not…
Q: Table 3-11 Assume that Jamaica and Norway can switch between producing coolers and producing radios…
A: Opportunity cost refers to what you have to give up to buy what you want in terms of other goods or…
Q: If we plot the accounting definiton Y = C +1 and the consumption function C=cY on axes labelled C…
A: The objective of the question is to understand the impact of an increase in the propensity to…
Q: Your college newspaper, The Collegiate Investigator, sells for 90¢ per copy. The cost of producing x…
A: The cost function represents the total cost of production a firm incurs at different output levels.…
Q: $200 is not the correct answer.
A: Monopolistic competition is a market structure characterized by a large number of firms selling…
Q: 4. Understanding different policy options to correct for negativeexternalities Carbon dioxide…
A: Negative externality occurs when cost or damage of an activity is borne by a third party without…
Q: The following graph plots equilibrium in the money market at an interest rate of 1.5% and a quantity…
A: Marginal Propensity to Consume (MPC) measures the proportion of an increase in income that gets…
Q: The graph shows the marginal private benefit from a law degree and the marginal cost of obtaining a…
A: Marginal social benefit is a net benefit or net satisfaction received by consumers after the…
Q: • A beekeeper lives adjacent to an apple orchard. • The orchard owner benefits from the bees because…
A: When a firm produces a good sometimes it creates cost or benefits for other firms. If it is creating…
Q: Should the French government relax its AOC system, allowing French vintners to expand the size of…
A: It is a complex and multifaceted question that needs careful consideration whether the French…
Q: Suppose Malaysia's production possibilities include a maximum of 80 units of rice or 120 units of…
A: In economics, comparative advantage is the principle that a country should specialize in producing…
Q: a. Game is repeated few times and discount rates are low b. Game is repeated many times and discount…
A: Below is the pay-off matrix for each player.Player 2ConservePlunderPlayer 1Conserve 100, 100-100,…
Q: The area representing deadweight loss is the area of government revenue is Domestic Consumption…
A: Deadweight loss is a concept used in economics to describe a cost to society created by market…
Q: Consider this table, which shows hypothetical balance-of-payments data for the United States. Select…
A: A country's foreign exchange transactions for a specific year are recorded financially as a balance…
Q: Refer to the figure below. Price LRAS Level 1 SAAS, SAAS, ADI Quantity of Output Suppose the economy…
A: Macroeconomic equilibrium is a state of the economy in which aggregate demand equals aggregate…
Q: The balance sheet for the newly formed ACME Bank is shown below. Reserves listed on the balance…
A: Banks foster a mutually advantageous relationship between persons saving money and those investing…
Q: Instructions: Enter your answers as a whole number. a. Suppose the firm has the ability to be a…
A: Profit maximisation output means the amount of output that yields maximum profit when produced. It…
Q: (Figure: Increase in Worker Wages) Which might occur due to an increase in wages in a labor market?…
A: The stock bend for work (S) has moved from S0 to S1, demonstrating an expansion in the stock of…
Q: (price per pound) $4.00 $1.50 $1.00 10,000, 02 2000. 5 O None of these answers are correct. O 8000.…
A: Perfect competition is a market form with a high number of buyers and a high number of sellers.…
Q: Which of the following statements regarding immunization is correct?
A: Immunization is used to save the portfolio immunized from the changes in some variables like…
Q: The following graph shows a hypothetical economy in long-run equilibrium at an expected price level…
A: Aggregate demand is the amount of total quantity of goods demanded in an economy, whereas aggregate…
Step by step
Solved in 4 steps with 1 images
- a. . Coca-Cola cuts its price below that of Pepsi-Cola to increase profit. b. A Single firm, protected by a barrier to entry, produces a personal service that has no close substitutes c. barrier to entry exists, but the good has some close substitutes d. A museum offers discounts to students and seniors e. A firm can sell any quantity it chooses at the going price f. A firm experiences economics of scale even when it produces the quantity that meets the entire market demand. 1. Which of the six cases are monopolies or might give rise to monopoly? 2. which are legal monopolies and which are natural monopolies? can any of them price discriminate? if so, why? 3. What are the distinguishing features of oligopoly? 4. Why are breakfast cereals made by firms in oligopoly? Why isn't there monopolistic competition in that industry? 5. Business Week reported that Energizer is gaining market share against competitor Duracell and its profit is raising despite the sharp rise in the price of zinc,…Suppose High-Tech Software sells two products-a word-processing package and a spreadsheet package. Suppose that the business community values the word-processing package at $100 per unit and the spreadsheet package at $250 per unit while the university community values the word-processing package at $125 and the spreadsheet at $200. (Assume that the marginal cost of each unit is zero.) a. What are the profit-maximizing price that High-Tech should charge if they sell each product separately and what is the total price of the two goods? b. If High-Tech is able to engage in tying, what is the profit-maximizing price for the two products as a bundle? c. Should this be legal?Rent controls force landlords to price apartments below the equilibrium price level. An immediate effect is a shortage (excess demand) of apartments, because the quantity of apartments demanded is greater than the quantity supplied at the regulated price. When cities prevent landlords from charging market rents, which of the following are common long-run outcomes? Check all that apply. The quantity of available rental housing units falls. ONonprice methods of rationing emerge. O The quality of rental housing units falls. Black markets develop.
- A large share of the world supply of cocoa beans comes from Ghana and Ivory Coast. Suppose that the marginal cost of producing cocoa beans is constant at GHC1000 per bag and the demand for cocoa beans is described by the following schedule. Price (GHC) Quantity (bags) 5000 6000 7000 8000 9000 10000 11000 12000 8000 7000 6000 5000 4000 3000 2000 1000 a) If there were many suppliers of cocoa beans, what would be the price and quantity? b) If there were only one supplier of cocoa, what would be the price and quantity? c) At a meeting in October 2017 in Accra, the leaders of the two leading producers of cocoa beans discussed the possibility of cooperating to boost the price of cocoa. If Ghana and Ivory Coast formed a cartel, what would be the price and quantity? If the countries split the market evenly, what would be Ghana's production and profit? f) What would happen to Ghana's profit if it increased its production by 1000 cocoa while Ivory Coast stuck to the cartel agreement? g) Use your…1. There are two brands of cigarettes X, Y. The demand for each is as follows: Qx = 80 - 2p Qy = 60 - 0.5p Assume that the marginal cost of producing cigarette X is $10, the marginal cost of producing cigarette Y is $8, and that the market for both cigarettes is perfectly competitive. Assume that each pack of cigarette X smoked does $5 worth of health damage to the smoker, and a total of $4 worth of health damage to the smoker’s neighbors via second-hand smoke. Each pack of cigarette Y smoked does $6 worth of health damage to the smoker, and $5 health damage to the smoker’s neighbors. (a) Explain why the public supply curves differ from the private supply curves, and how this represents the externality from second-hand smoke. Highlight the area(s) of your diagram that represents a social loss. (b) Calculate the social loss for both. (c) Suppose the government decides to pursue a Pigouvian solution to eliminate social loss. What's amount of tax or subsidy would the government…1. There are two brands of cigarettes X, Y. The demand for each is as follows: Qx = 80 - 2p Qy = 60 - 0.5p Assume that the marginal cost of producing cigarette X is $10, the marginal cost of producing cigarette Y is $8, and that the market for both cigarettes is perfectly competitive. Assume that each pack of cigarette X smoked does $5 worth of health damage to the smoker, and a total of $4 worth of health damage to the smoker’s neighbors via second-hand smoke. Each pack of cigarette Y smoked does $6 worth of health damage to the smoker, and $5 health damage to the smoker’s neighbors. a. Suppose the government decides to pursue a Pigouvian solution to eliminate social loss. What's amount of tax or subsidy would the government implement? What's the resulting quantity of demand for both cigarettes. b. Besides the Pigouvian solution, what else solution do you have? What are the conditions in order to successfully implement this?
- 1. There are two brands of cigarettes X, Y. The demand for each is as follows: Qx = 80 - 2p Qy = 60 - 0.5p Assume that the marginal cost of producing cigarette X is $10, the marginal cost of producing cigarette Y is $8, and that the market for both cigarettes is perfectly competitive. Assume that each pack of cigarette X smoked does $5 worth of health damage to the smoker, and a total of $4 worth of health damage to the smoker’s neighbors via second-hand smoke. Each pack of cigarette Y smoked does $6 worth of health damage to the smoker, and $5 health damage to the smoker’s neighbors. (a) Plot the private demand curve and private supply curve for both cigarettes on separate axes. (b) What is the privately efficient quantity demand of both cigarettes? (c) Add the public supply curves to the graphs you plot in (a). (d) What is the socially efficient quantity demand of both cigarettes?Rent controls force landlords to price apartments below the equilibrium price level. An immediate effect is a shortage (excess demand) of apartments, because the quantity of apartments demanded is greater than the quantity supplied at the regulated price. When cities prevent landlords from charging market rents, which of the following are common long-run outcomes? Check all that apply. a. The quantity of available rental housing units falls. b. Nonprice methods of rationing emerge. c. The quality of rental housing units falls. d. Landlords earn lower profits from renting housing units, but the rent charged has no effect on either the quantity or quality of rental units.Figure 12-6 Price (dollars per pound) Market 3 price 2 0 10 20 30 MC ATC D=MR 40 Quantity (thousands of pounds) Figure 12-6 shows the demand, marginal cost (MC) and average total cost (ATC) curves for Jason's House of Apples. Refer to Figure 12-6. Jason is currently producing 20 thousand pounds of apples. To maximize his profit Jason should keep production at 20 thousand pounds. O increase production to the output rate indicated by point e. increase production to the output rate indicated by point d. O decrease production to the output rate indicated by point a.
- V.A producer faces the following demand schedule for the next medicine from one of its popular researchers: Quantity Demanded O boxes Price $100 90 100,000 80 200,000 70 300,000 60 400,000 50 500,000 40 600,000 30 700,000 20 800,000 10 900,000 1,000,000 The researcher is paid $2 million to development of new medicine, and the marginal cost of producing new medicine is a constant $10 per box. a. Compute total revenue, total cost, and profit at each quantity. What quantity would a profit maximizing producer choose? What price would it charge? b. Compute marginal revenue. (Recall that MR =A TR/A Q.) How does marginal revenue compare to the price? Explain. c. Graph the marginal-revenue, marginal-cost, and demand curves. At what quantity do the marginal revenue and marginal-cost curves cross? What does this signify? d. In your graph, shade in the deadweight loss. Explain in words what this means. wwww www e. If the researcher were paid $3 million instead of $2 million, how would this affect…The many identical residents of Whoville love drinking Zlurp. Each resident has the following willingness to pay for the tasty refreshment: Quantity First bottle Second bottle Third bottle Fourth bottle Fifth bottle Further bottles Willingness to Pay (Dollars) 10 8 Each Whovillian will consume The cost of producing a bottle of Zlurp is $3.50, and the competitive suppliers sell it at this price. (The supply curve is horizontal.) 6 4 2 0 Producing Zlurp creates pollution. Each bottle has an external cost of $1. Taking this additional cost into account, total surplus per person in the allocation you previously determined decreases to S Cindy Lou Who, one of the residents of Whoville, decides on her own to reduce her consumption of Zlurp by 1 bottle. Cindy's consumer surplus (ignoring the cost of pollution she experiences) is now S by S Consumption per person is now person external cost of 5 bottles and receive a consumer surplus of $ Mayor Grinch imposes a $1 tax on each bottle of Zlurp.…1. Price and output in a competitive price-searcher market Consider a price-searching firm, Sean's Fire Engines, which sells fire engines in the fictional country of Pyrotania. Initially, Sean's produced six fire engines but then decided to increase production to seven fire engines. The following graph shows the demand curve the firm faces. To sell the additional engine, Sean's must lower its price from $100,000 to $50,000 per engine. (Hint: Sean's Fire Engines gains revenue from the additional engine it sells, but it also loses revenue from the initial six engines because it sells them all at the lower price.) On the following graph, use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial six engines by selling at $50,000 rather than $100,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $50,000. re engine) 250 225 200 Q Search Revenue Lost Col