Assume that the Demand elasticity of a good is -1 and the Supply elasticity is +2. Assume also that (i) that the price of a complement decreases and therefore Demand shifts out by +2% and (ii) because one of the inputs in production declined in price, the Supply shifts by +2%. In partial equilibrium, the % change in the equilibrium price is 000 -2% -1% 0% 1% 2%
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- Define EquilibriumWhich of the following statements is/are true about inferior good? It is a good whose demand curve shifts leftward when the income of buyers increase and rightward when the income of buyers decrease. It is a good whose demand curve shifts rightward when the income of buyers increase and leftward when the income of buyers decrease. It is a good whose demand curve shifts leftward when the income of sellers increase and rightward when the income of sellers decrease. It is a good whose demand curve shifts leftward when the income of buyers decreases and rightward when the income of buyers increases.. Which of the following statements is/are true? Equilibrium is an unchanging situation in which all forces at work within a system are canceled by the other. The value of what must be forgone to undertake an activity is called opportunity cost. Supply curve is a graph showing the quantity of a good that buyers wish to buy at each price. The study of how people make choices under condition of…Let's say that the demand side of the market for Blue Soda is comprised of 3 leading agents/individuals: Anthony, Brad, and Claire. Let P be the price of 1 liter of Blue Soda, and Qd be the quantity demanded of Blue Soda in liters. Here are the key points to the problem: - Anthony buys only one liter of Blue Soda if the price of it falls below his choke price of $10. - Brad's demand for Blue Soda is defined by QdB = 5 - P/2 - Claire buys 2 liters if the price is below $5, 1 liter if the price is between $5 and $10, and nothing if the price is above $10. Using this information, please sketch the individual demands and the market demand by aggregating the three agents/individuals. Label the graph clearly. Please make sure to sketch the individual demands first and then sketch the market demand.
- find the equilibrium price ratio and calculate the consumers’ demand for each of the two goods U1(x,y)=4x+2y, U2(x,y)=x+y Could you tell me why Px/Py<2, consumer will want x only? Px/Py<1 both consumers will only want x too ? Could you tell me how to find the price ratio to analysis want x only or want x,y?Good A (an inferior good) and Good B (a normal good) are viewed by consumers to be substitute products. Suppose that the price of Good B falls at the same time that consumer income increases. What is the net effect of these two events on equilibrium in the market for Good A? an increase in equilibrium quantity and an indeterminate effect on price a decrease in both the equilibrium price and quantity an indeterminate effect on quantity but an increase in price an increase in both the equilibrium price and quantityIf there is an increase in supply for a product, how will market equilibrium be restored? As the product's price decreases, the quantity demanded increases until a new equilibrium is gained. As the product's price increases, the quantity demanded decreases until a new equilibrium is gained As the product's price increases, the quantity demanded increases until a new equilibrium is gained. As the product's price decreases, the quantity demanded decreases until a new equilibrium is gained.
- Assume that coffee and tea are substitutes. John and Pamela are vendors at MANCOSA campus. John sells tea and Pamela coffee. They usually sell these drinks at R15 per cup, However, it is a cold Monday morning and Pamela decides to decrease the price of coffee to R12 a cup. The resultant effect would be movement along the demand curve for coffee takes place since it is a change in the price of coffee. Select one: O True O FalseX is an inferior good. If there is an increase in incomes, then (quantity supplied,quantity demanded, supply, demand) for good X will (increase, decrease). This will cause the equilibrium price to (increase, decrease) and quantity to (increase, decrease). If a new type of fertilizer is invented that makes coconut trees twice as productive, the (quantity supplied, quantity demanded, supply, demand) for coconuts will (increase, decrease). This will cause the price to (increase, decrease) and quantity to (increase, decrease).ECON302 TPS2: Demand Suppose that Graham enjoys painting green people. He has very particular preferences and must have exactly 3 gallons of yellow paint for each 2 gallons of blue paint. Let Y be the number of gallons of yellow paint and B be the number of gallons of blue paint. Also, let PÅ be the price of blue paint. Suppose Graham has $20 to spend on paint. Also, the price of yellow paint is Py = $1 per gallon. a) Graph Graham's price consumption curve for the prices PB = $1, and PB = 2, PB = $4. Please put the number of gallons of B on the vertical axis and the number of gallons of Y on the horizontal axis. Be sure to label your graph carefully and accurately.
- Name a normal good, an inferior good, a set of substitute goods, a set of complements that are used in your household daily. For the normal good, make a (Hypothetical) linear demand schedule with 7 different price points and corresponding quantity demanded by your own household. For the same normal good, make another (Hypothetical) linear demand schedule with 7 different price points and corresponding quantity demanded by your neighbor. Assuming that you and your neighbor are the only two households in the market, make a market demand schedule for the same normal good. Draw and interpret a graph to show the market demand and impact of changes in quantity demanded if the price of the same normal good decreases. For the inferior good, draw and interpret a graph showing the demand curve and a shift in the curve if your income increases. For anyone good from the set of substitutes, draw and interpret a graph showing the demand curve and a shift in the curve if the price of the substitute…If the demand for a good increases when incomes rise and decreases when incomes fall, the good is called a normal good. See 3-2: Demand True FalseConsider two markets: the market for waffles and the market for pancakes. The initial equilibrium for both markets is the same, the equilibrium price is $6.50, and the equilibrium quantity is 35.0. When the price is $9.75, the quantity supplied of waffles is 57.0 and the quantity supplied of pancakes is 101.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for pancakes. Please round to two decimal places. Supply in the market for waffles is