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Given that the demand and supply function of commodity X are Qd=20-1/6p while Qs=18+1/6p. Find the equilibrium price and quality for commodity X.
4. An economy consists of three workers: Larry,
Moe, and Curly. Each works ten hours a day and can produce two services: mowing lawns and washing cars. In an hour, Larry can either mow one lawn or wash one car; Moe can either
mow one lawn or wash two cars; and Curly can either mow two lawns or wash one car.
a. Calculate how much of each service is produced under the following circumstances, which we label A, B, C, and D:
• All three spend all their time mowing
lawns. (A)
• All three spend all their time washing cars. (B)
• All three spend half their time on each activity. (C)
• Larry spends half his time on each activity, while Moe only washes cars and Curly only mows lawns. (D)
b. Graph the production possibilities frontier for this economy. Using your answers to part (a), identify points A, B, C, and D on your graph.
c. Explain why the production possibilities frontier has the shape it does.
d. Are any of the allocations calculated in part (a) inefficient? Explain.
A bottle of wine costs $8 and a quiche costs $5. Lily is planning to spend all of her income, choosing a consumption bundle whereby she would receive marginal utility worth $10 from the last bottle of wine and marginal utility worth $4 from the last quiche. In order to get more utility out of her given resources, Lily could
Assume that the market price for a 5kg bag of rice is R80 and the government has announced that 5kg bag of rice cannot be sold for less than R100 with the aid of a well labelled diagram , explain the effect the above government decision will have in the market for rice
discuss any five factors that could lead to an increase in the demand
Explain why firms do not immediately go out of business if total revenue fails to cover total costs of production
The demand for petrol rises from 500 to 600 barrels when the price of a particular scooter is reduced from Rs. 25000 to Rs. 22000. Find out the cross elasticity of demand for the two. What is the nature of their relationship?
Assume that the market price of a 5kg bag of rice is R80, the gorvenment has announced that, a 5kg bag of rice can be sold less than R100. With aid of well labelled diagram, explain what the effect the above decision will have in the market for rice
What would occur to the total revenue coming from this product is you increase price to $11 per unit?
As a result of pressure from the south African clothing and textile workers union (SACTWU), the south African government has decided to increase the tariff on textiles. Explain who would gain and who would lose as a result of this decision taken by the South African government.
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