ECON1101 Chapter 4: Chapt 4 - Demand and Supply - An Equilibrium Analysis

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18 Jul 2018

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Chapter 4 demand and supply: an equilibrium analysis. To obtain agg supply curve sum up supply curves horizontally. E. g at a price of , panel a can produce 1 apple, while panel b can produce 2 apples. Therefore, in agg supply curve, at a price of , can produce 3 apples. At a price of , panel a can produce 2 apples, while panel b can produce 4 apples. Therefore, in agg supply curve, at a price of , can produce 6 apples. To obtain agg demand curve sum up demand curves horizontally. E. g at a price of (per apple), panel a is willing to consume 2 units, while panel b is willing to consume 4 units. Therefore, in agg demand curve, at a price of , the demand is 6 apples. At a price of (per apple), panel a is willing to consume 1 unit, while panel b is willing to consume 2 units.

Related Questions

A) If the average unskilled worker earns $8 per hour in the country and the cost of living is 25% higher in the city, the average unskilled urban worker must earn _____ in location equilibrium.

B) Assume household A and household B produce oranges and apples in an economy with no transaction costs. If household A specializes it can produce 4 oranges or 8 apples, and household B can produce 2 oranges or 2 apples.

What is the opportunity cost in terms of apples of household A to produce one 1 orange?

A. 2 apples

B. 2/3 apples

C. 1 apples

D. 3 apples

C) What is the opportunity cost in terms of oranges of household A to produce 1 apple?

A. 1 orange

B. 1/2 orange

C. 4 oranges

D. 2 oranges

D) When a factory uses indivisible inputs (machines) to allow workers to specialize in a narrowly defined task, leading to higher output per worker and lower average cost, this is an example of?

A. economies of scale

B. constant returns to scale

C. marginal propensity to consume

D. zero economic profit

magentahyena635

1.The key condition for equilibrium to occur in a market is: A. the demand curve equals the supply curve. B. quantity demanded equals quantity supplied. C. price equals quantity. D. demand for one good equals demand for all other goods.

2. Without taxes, the market price per bag of apples is $5. With a $2 tax per bag of apples, buyers now pay $5.75 per bag. What is the final price per bag of apples received by sellers? A. $5.00 B. $7.75 C. $3.00 D. $3.75

3.Which of the following is a reason why the demand curve for an item would be more elastic? A. The item is a necessity. B. People's incomes are very high relative to the cost of the item. C. The item has many very good substitutes. D. The cost of the item forms a very small part of the consumer's budgets.

1. If there has been a 10% increase in Consumer income between two periods, what was the percentage change in demand for foreign travel? For tobacco products? For flour? (Hint use the income elasticity values in Table 4-4.)

2. Agricultural commodities are known to have a price-inelastic demand and to be necessities. How can this information allow you to explain why the income of farmersfalls (a) after a good harvest? (b) In relation to the incomes in other sectors of the economy?

3. Suppose that the cross-price elasticity of demand between McIntosh and Golden Delicious apples is 0.8, between apple and apple juice is 0.5, between apples and cheese is 0.4, and between apples and beer is 0.1 What can you say about the relationship between each set of commodities?

4. (a) If price of pork increases by 10 percent, by how much does demand for beef change? (b) If price of pork increases by 10 percent, by how much does demand for food change? (hint use the cross-price elasticity values in Table 4-5.)

ECON1101 Chapter 4: Chapt 4 - Demand and Supply - An Equilibrium Analysis

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