skytermite28

If the demand and supply function are given by, P=20e*0.4Q and P=100e*-0.2Q, respectively, find the equilibrium price and quantity, and calculate the consumers and producers surplus

Homebase (Pty) Ltd is the manufacturer of a robot vacuum cleaner, iRobot-H. It uses built-in
cameras and sensors to find its way around a home without fuss. It has different cleaning
modes and advanced features such as the ability to produce maps of where it has cleaned
and for how long. It really takes the drudge out of vacuum-cleaning homes.
The company sells this product through 55 independent retail stores across the country.
Homebase’s marketing research team developed the demand equation below for iRobot-H,
based on its average retail sales over the last 18 months.
Q = 5 200 – 42P + 20PC + 5.2Y + 0.2A + 0.25S
(2.002) (17.5) (6.2) (2.5) (0.09) (0.21)
R2 = 0.55 n = 55 F = 4.88
The following are the independent variables and their current values:
 Q = quantity sold per month (sales)
 P (in rand) = Price of iRobot-H = R2 900
 PC (in rand) = Price of leading competitor’s product = R3 200
 Y (in rand) = Average per capita income in the country = R25 000
 A (in rand) = Homebase’s monthly advertising expenditure = R20 000
 S (in units) = Number of robot vacuum cleaners sold across the country = 7 000
 F (critical value) = 3.38 at 5% level of significance

Show all calculations and relevant formulas.
2.1. What is the meaning of the parameters –42P, 20PC and 5.2Y? (3)
2.2. Calculate the elasticities for the price of iRobot-H (P), the product of the leading
competitor (PC), average income (Y) and advertising expenditure (A). (8)
2.3. What will happen to the revenue of the company if Homebase decides to increase its
price, given that all other factors remain the same? (2)
2.4 How significant are the independent variables in total and individually to explain the
total sales that Homebase can expect to make? (12)
2.5. Assume that the following changes take place in the market for iRobot-H vacuum
cleaners:
The price (P) of iRobot drops to R2 500, the price of the competitor increases to
R3 300 and the average per capita income of the country increases to R28 000.
2.5.1. Calculate the new quantity of vacuum cleaners that iRobot-H can expect to
sell. (1)
2.5.2. Calculate the arch elasticity of demand, cross price elasticity of demand and
income elasticity of demand for iRobot-H vacuum cleaners.

Continue to consider this discrete Bertrand model, but now assume that each student has a constant cost of 5 that is deducted from all payoffs. So whoever has the low number wins their number, minus 5. Whoever has the high number loses 5 total. In the event of a tie, each student wins an amount equal to their number divided by two, then minus five. Find any Nash equilibria in this game. Explain your reasoning.

Suppose a small family farm produces grain.  Grain is a final product, since it is consumed by the producers on the farm.  Grain is a capital good, since it is used as feed for the farm’s draft animals.  Grain is also a material input, since it is used as seed for the next season’s crop.  The producers on the farm spend 2,000 hours per season harvesting grain, and 500 hours per season on non-labor activities, such as child rearing and leisure.  It currently takes 5 hours to harvest 1 bushel of grain.  The farm requires 25 bushels of grain for replacing the capital used in production, 15 bushels of grain for replacing the materials used up in production, and 100 bushels of grain for the consumption of the producers on the farm at their customary standard of living.

Michael Sandel, an acclaimed Harvard Philosopher has claimed that even if markets
may under perfect conditions allocate resources ‘efficiently’ it may not be moral or ethical
always, use Sandel’s works as available online/ journals etc to argue for or against this view.

During the current year ABC computer company makes $1M worth of computer components. Their labor costs are $500k and they pay $100k in indirect taxes. ABC sells all of the output to XYZ who incorporate the components into 50 computers. Assembly of each computer requires $10k of labor. They also pay $1k in interest per computer on loans that they took out to finance the construction of the computers. They market the computers for $40k each. By the end of the year only 35 of the computers have been sold. The unsold computers are held on their books as inventory at $31k each.

(a) Calculate GDP for this economy by each of the expenditure, product (i.e. value added) and income approaches (show how each number is obtained).

(b) Now suppose instead that ABC produces $2M of components half of which are sold directly to consumers. Their labor costs and indirect taxes both double. The remaining components are sold to XYZ as before and there is no change to what XYZ does. Recalculate GDP by each of the approaches.

A firm has the following short-run production function: Q 5 50L 1 6L2 2 0.5L3 where Q 5 Quantity of output per week L 5 Labor (number of workers) a. When does the law of diminishing returns take effect? b. Calculate the range of values for labor over which Stages I, II, and III occur. c. Assume each worker is paid $10 per hour and works a 40-hour week. How many workers should the firm hire if the price of the output is $10? Suppose the price of the output falls to $7.50. What do you think would be the short-run impact on the firm’s production? The long-run impact?

5.M1 is:

A) currency + traveler's checks + checking deposits

B) currency +coins

C) currency + checking deposits

D) currency

6.If a bank's assets are $200 and the value of its weighted assets is $125, which is the

more restrictive capital requirement: the U.S. minimum equity ratio or the Basel Accord

requirement?

A) They are the same.

B) The United States ratio is the most restrictive.

C) The Basel Accord is the most restrictive.

D) There is not enough information provided to answer the question.

7. Which of the following includes consequences of the purchase and assumption method

of dealing with an insolvent bank?

A) The FDIC sells most of the assets and liabilities of the insolvent bank to another

bank.

B) Depositors lose their deposits and bank branches close.

C) The FDIC sells the insolvent bank's liabilities and earns a profit.

D) The bank keeps its original name.

8. Which of the following is a consequence of the payoff method of dealing with an

insolvent bank?

A) The FDIC sells the bank's assets for as much as it can get to pay off depositors.

B) The insolvent bank remains open under a new management.

C) The FDIC fund is not affected.

D) Small depositors lose 50 percent of their deposits.

9. Deposit insurance creates a moral hazard because it:

A) eliminates depositors' incentives to monitor banks.

B) reduces the cost of a bank failure for depositors.

C) encourages depositors to leave their funds in a weak bank.

D) All of the answers are correct.

10. The Basel Accord set international standards for:

A) interest rate volatility.

B) reserve ratios.

C) bank capital requirements.

D) loan risk.

11. U.S. capital requirements mandate a ________ minimum capital–assets ratio.

A) 0 percent

B) 10 percent

C) 5 percent

D) 50 percent

12. Which of the following securities are banks not allowed to hold?

A) high-rated corporate bonds

B) stocks

C) municipal bonds

D) Treasury bonds

13. A bank run is an extreme form of:

A) credit risk.

B) interest rate risk.

C) low bank esteem.

D) liquidity risk.

14. One explanation for a bank run is:

A) adaptive expectations.

B) self-fulfilling expectations.

C) poor bank management.

D) that rising oil prices mean depositors require more cash.

The price of Video Game rentals is $2 For MUA/$ and $4 for MUB/$, the price of Energy Drinks is $2, and
the Budget = $28.
19) If the price of video game rentals is $4, the
utility-maximizing combination is ________ video game rentals and ________ energy drinks. (3 points)
A) 1; 4
B) 2; 10
C) 10; 4
D) 11; 10
E) none of the above

20) Suppose there is a large increase in the demand for widgets due to changes in consumer tastes, and a small
decrease in the supply of widgets as a result of higher input prices. The equilibrium price and quantity of
widgets will: (3 points)
A) both increase; the impact of the change in demand on the equilibrium quantity is larger than the
impact of the change in supply.
B) both decrease; the impact of the change in demand on the equilibrium quantity is larger than the
impact of the change in supply.
C) fall and rise, respectively; the impact of the change in supply on the equilibrium quantity is larger
than the impact of the change in demand.
D) rise and fall, respectively; the impact of the change in supply on the equilibrium quantity is larger
than the impact of the change in demand.
E) do none of the above.

The Great Depression. Read the prompt carefully, making sure to answer all parts of the question.

Jeremy Attack and Peter Passell outline three economic models or frameworks that together help explain the onset and the spread of the Great Depression in the United States. Describe briefly the main phases of the Great Depression in the US. Be sure to evaluate the usefulness of the three models in explaining the onset and the spread of the Depression. In term of the recovery from the Depression, which factor does Christina Romer single out as especially important for the US? Do you agree with Romer? Be sure to justify your answer.

In the present paradigm, it has become evident that operational leaders and strategic leaders in health care must be able to appraise how economics impacts health care in the United States. Furthermore, it is critical successful leaders to possess an understanding of the variables and nuances that shape how supply and demand in this heavily regulated industry so they may observe trends and opportunities that lead to a functional organizational system.

Imagine that you are a manager running a unit in a rehabilitation center. Up to this point, your primary population of payers has been elderly patients who come into the center for physical therapy. Recently, there has been a demographic shift in the community. A large number of your primary population has moved out of the area or died, which has caused a shift in your revenues. You have been tasked by your director to illustrate the cost and revenue numbers relative to insurance payouts to ensure that your cost does not exceed your revenue. Drawing on your current professional expertise and understanding drawn from the required resources for this week, create an initial post in which you communicate how the potential payer mix relates economically to changing demographics in your given community. What potential solutions would you suggest to your director that might overcome the demographic shift? Analyze economic theories that are germane to your provision of services and identify one theory that might apply to this specific situation.

Suppose you are the proprietor of the only bar in Dallas. Since you are the only place in town for people to get drinks you exercise some market power and face a downward sloping demand curve for drinks given by P = 10 - (3/2)Q for each individual. Your total costs are given by TC = Q. There are 100 individuals with identical demand.

1. Assuming that you must follow a uniform pricing strategy, what is the profit maximizing price and quantity and the associated profit? What is consumer surplus? Is the market efficient?
2. If each person is charged their reservation price, what type of price discrimination is this? Assuming you can engage in this pricing scheme, what is your profit maximizing price and quantity and the associated profit? What is consumer surplus? Is the market efficient?
3. Now assume that you decide to try a two-part tariff scheme instead, charging a price per drink and a cover charge at the door. What is the optimal two-part tariff charged to each person? How many drinks will be sold to each person? What is your total profit associated with this scheme? What is the total consumer surplus? Is the market efficient?
4. Assume that your clientele is composed of two types: 50 customers are heavy drinkers with individual demand described by P_H = 15 - Q_H and 50 customers are light drinkers with individual demand described by P_L = 10 -3Q_L. Which group would you rather charge a higher price? Why?
5. Assume that the market is split as described before. There is no constraint on the number of drinks you can sell. You can charge a different price to each group. What is the optimal price and corresponding quantity for each segment of the market? What is your total profit under this scheme? What type of price discrimination is this?
6. Assume that the market is split as described before. The city of Dallas tells you that can only sell 325 drinks in total. You can charge a different price to each group. What is the optimal price and corresponding quantity for each segment of the market? What is your total profit under this scheme?

Workers are compensated by firms with “benefits” in addition to wages and salaries. The most prominent benefit offered by many firms is health insurance. Suppose that in 2000, workers at one steel plant were paid $45 per hour and in addition received health benefits at the rate of $9 per hour. Also suppose that by 2010 workers at that plant were paid $47.25 per hour but received $20.25 in health insurance benefits.

a. By what percentage did total compensation (wages plus benefits) change at this plant from 2000 to 2010?

Instructions: Round your answer to 2 decimal places.

Total compensation (Click to select)decreasedincreased by percent.

What was the approximate average annual percentage change in total compensation?

Instructions: Round your answer to 2 decimal places.

percent.

b. By what percentage did wages change at this plant from 2000 to 2010?

Instructions: Enter your answer as a whole number.

Wages (Click to select)decreasedincreased by percent.

What was the approximate average annual percentage change in wages?

Instructions: Round your answer to 1 decimal place.

percent.

c. If workers value a dollar of health benefits as much as they value a dollar of wages, by what total percentage will they feel that their incomes have risen over this time period?

Instructions: Round your answer to 2 decimal places.

percent.

What if they only consider wages when calculating their incomes?

Incomes go (Click to select)downup by percent.

d. Is it possible for workers to feel as though their wages are stagnating even if total compensation is rising?

(Click to select)YesNo.

A maiono face the following demand curve

Price

$10

$9 $8

$7

$6

$5 $4

$3

Quantity Demanded

5

10

16 23

31 49

52

60

Refer to Table 15-3. Consider that the monopolist has total fixed costs of $40 and a constant marginal cost of 55, AL the profit-maximizing level of output, what is the monopolist's average total cost?

Can you guys help me with my assignment Question 2 c, d and e

Suppose that the country of Xanadu saves 20% of its income and has a capital-output ratio of 4.

a) Using the Harrod-Domar model,calculate the rate of total GDP in Xanadu.

b) If population growth were 3% per year and Xanadu wanted to achieve a growth rate of per capita GDP of 4% per year, what would its savings rate have to be to get to this growth rate?

c) Now return to the case where the savings rate is 20% and the capital-output ratio is 4. Imagine ,now, that the economy of Xanadu suffers violent labour strikes every year , a quarter of it goes unused because of these labour disputes. if population growth is 2% per year, calculate the rate of per capita income growth in Xanadu under the new scenario?

1. If we want to understand the major portion of today’s economic activity in an industrial economy, we should look at

a. perfect competition and pure monopoly

b. perfect competition and oligopoly

c. oligopoly and monopolistic competition

d. monopolistic competition and monopoly

_________________________________________________

2. If an oligopolist cuts the price of its product

a. customers will switch to a rival’s product

b. customers remain unchanged in number

c. customers switch from rival firms to buy from him

d. rival firms do not react

Bottles of glue: _________________________

Bales of hay: ____________________________

Show transcribed image text

The price of good 1 is initially at $1, and the price of good 2 is initially at $2, with $24 avaiable to spend. The price of good 2 increases to $4. If Duane

Q 1: Below is a production possibilities table for consumer goods and capital goods : Production Alternatives Capital Goods Consumer Goods A 0 70 B 3 65 C 6 55 D 9 40 E 12 20 F 15 0 a. Show these data graphically. Upon what specific assumptions is this production possibilities curve based? b. If the economy is at point C, what is the cost of one more unit of capital good? Of one more unit of consumer good? Explain how the production possibilities curve reflects the law of increasing opportunity costs. c. If the economy characterized by this production possibilities table and curve were producing 7 units of capital goods and 45 units of consumer goods, what could you conclude about its use of its available resources? d. What would production at a point outside the production possibilities curve indicate? What must occur before the economy can attain such a level of production? e. Assume consumer good are bread and cookies here. What happens to this frontier if disease kills half of the economy’s hens and cows? Q 2(a): How does self-interest help achieve society’s economic goals? Why is there such a wide variety of desired goods and services in a market system? In what way are entrepreneurs and businesses at the helm of the economy but commanded by consumers? b. Why is private property, and the protection of property rights, so critical to the success of the market system? c. How the market system decides what to produce, how to produce it, and who obtains it. Q 3: How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity rise, fall, or remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts? Use supply and demand diagrams to verify your answers. i. Supply decreases and demand is constant. ii. Demand increases and supply increases. iii. Supply increases and demand decreases. b. Explain why the price in competitive markets settles down at the equilibrium intersection of supply and demand. Explain what happens if the market price starts out too high or too low. c. Consider the following events: Scientists reveal that consumption of oranges decreases the risk of Corona Virus and, at the same time, farmers use a new fertilizer that makes orange trees more productive. Illustrate and explain what effect these changes have on the equilibrium price and quantity of oranges.

Outline how 1 measure that the human development index is used to promote 

1. economic development 

2.economic growth 

Suppose that Allison has an accounting degree, but she lost her job two months ago when her company merged with another firm. Allison hasn't been able to find another accounting job, so she has taken a part-time job as a sales clerk at a clothing store. As a result the official unemployment rate will:

decrease

increase

not change

increase temporarily, then fall back to its original level

 Use a graphical approach to explain the effect of the following changes.

1. A new Covid 19 face mask, made in America, is successful in sales to Zambia.
2. Zambia reduces its interest rate compared to the U.S., causing investors to sell Zambian bonds and buy U.S. bonds.

iii. Zambians, unhappy with monetary unification, transfer their bank balances to the U.S.

(b) Briefly explain the five functions of money

Suppose there are two firms (firms 1 and 2) producing good X. Firm 1 has a marginal cost of $10 per unit
of X produced, while firm 2 has a marginal cost of $20 per unit of X produced. Suppose the two firms
decide to form a cartel and have the following collusive agreement: each firm will produce q = 30. In this
case, Q = q1 + q2 and that firms always receive the same price P at any given time. (10 marks)
a) What profit will each of the firms receive at the cartel agreement? (2)
b) Does either firm have an incentive to cheat (by increasing output to q = 40)? (2)
c) What is the Nash Equilibrium in this case? (3)
d) Is there anything Firm 2 can do to keep both firms producing according to the cartel agreement? (3)
Hint: Compare the profits Firms 1 and 2 earn in the cartel agreement and the Nash. Think back to the
Coase Theorem we looked at a few weeks ago…

Problem Scenario 
Covid-19 global economic pandemic has negatively affected economies as a whole at the global, 
national and regional levels. The novel effects of the fluidity of Covid-19 appears to continue to 
have negative impacts on the macro business model as the global recession seems to be inevitable. 
You are working as a macroeconomist in economic affairs in your local country, and you are tasked 
with analyzing the impact of Covid-19 on the economy and you are required to prepare notes on 
what specific government policies can be implemented as a stimulus package to jump-start the 
economy savings and investment market. The team meeting will be held in 3 days from the date 
of the assignment and because of limitation of time the Chief economist has given you the 
following guidelines: 
(a) You are required to identify four (4) key macroeconomic issues from the impact of Covid-19, 
(b) For each issue identified in (a) explain in detail what specific government policy/ies would you 
implement 
(c) For each government policy/ies identify in (b) what would be the rationale for your choice of 
policy 
(d) Your answer should be accompanied by relevant diagrams. 
[Total marks 60 marks.]

Assume that demand for services per period is P = 1000 − Q where Q is the stock of the durable consumed. Let the discount factor for both consumers and the firm be one. Assume that there are only two periods.

(a) What is the optimal rental rate for a monopolist that only leases? (b) What are the optimal prices for a monopolist that only sells, but is able to commit to its second-period price?

Columns 1 through 4 in the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the price of good A is $18.00, the price of good B is $6.00, the price of good C is $4.00, and the price of good D is $12.00. Ricardo's income is $142.00.

1.

a) Assume that a firm is considering whether to hire an additional employee. The firm has a 2-period (year) time horizon with fixed hiring costs in the first period (i.e., period 0). Given the information below, determine the post-hiring wage that the firm pays in period 1 so that it equates the present [discounted] value of marginal labor cost and marginal revenue product. Graph your results.

Hiring (initial) Wage (period 0) = $15,000
Hiring costs = $8,000
MRPl initially (period 0) = $10,000
MRPl post-hiring period = $30,000
"discount rate" = 5%

b) Revise your results from above using a 3-period time horizon for the firm (i.e, t= 0, 1, 2). Assume the post-hiring MRP is constant, as is the post-hiring wage (i.e., MRP1 = MPR2; and W1 = W2). Graph your results. Are your revised results consistent with the implications of the quasi-fixed labor cost model? Explain.

What are the strengths and weaknesses of the five contingent valuation approaches of valuing the physical environment?

In World 3.0, local needs and priorities are largely ignored compared to the economic gains

from global integration.

A) True

B) False

In the last week, Volkswagen (VW), the German car giant, has admitted cheating emissions tests in the US. According to the Environmental Protection Agency (EPA), some cars being sold in America had devices in diesel engines that could detect when they were being tested, changing the performance accordingly to improve results. VW has had a major push to sell diesel cars in the US, backed by a huge marketing campaign trumpeting its cars' low emissions. The EPA's findings cover 586,000 cars in the US only, including the VW-manufactured Audi A5, and the VW brands Jetta, Beetle, Golf and Passat. But VW has admitted that about 9 million cars worldwide are fitted with the so-called "defeat device".

Assume that all these cars were produced in Germany. As result of this scandal, Americans have decided not to buy any cars manufactured by VW.

What is the impact of this decision on the US balance of trade (fully explain), and US current account (fully explain)?

1)

Which of the following statements must be true in a game theory situation that results in a prisoners' dilemma?

Neither player has a dominant strategy in this game.

Neither player has an incentive to deviate unilaterally from the prisoners' dilemma outcome.

Both players could achieve a better outcome if they successfully collude.

a) Only i is true

b) Only iii is true

c) Only ii and iii are true

d) All three statements are true

2)

Carlise and Mary are the only two editors of mystery novels in the city of Readville. If Carlise and Mary collude to earn more profits, they would:

a) each reduce the number of books published and raise prices.

b) each reduce the number of books published and lower prices.

c) each increase the number of books published and raise prices.

d) each increase the number of books published and lower prices.

3)

Suppose that Rich and Sheri each own the two largest helicopter tour companies at the Grand Canyon. If each uses a pricing strategy that leads to a prisoner’s dilemma, what would be the result?

a) Both Rich and Sheri would earn a lot of profits.

b) Rich and Sheri would be better off by not cooperating with each other.

c) Tourists would end up paying a lot more for helicopter tours.

d) Tourists would end up getting great deals for helicopter tours.

Which of the following statements regarding cartels is not correct?

Cartels are sometimes difficult to maintain because a member can cheat by raising its price above the agreed price.

Cartels restrict industry output in order to raise price.

Cartels are inherently stable, because oligopolistic firms rarely change price.

are easier to establish and maintain when the cost functions of the individual members are more similar to one another.

How does the marginal benefit for a public good compare to its marginal cost when: a. there is an under allocation of resources for the provision of the public good? b. there is an over allocation of resources for the provision of the public good? c. there is an optimal allocation of resources for the provision of the public good?

1. Production point Pages typed Web pages created A 0 and 4 B 40 and 3 C 70 and 2 D 90 and 1 E 100 and 0 (a) Jean can either type her term paper or create Web pages during the limited time she has available. The table above shows her PPF. [02] (i) Can Jean type 90 pages and create 2 Web pages? (ii) Use the above numbers to calculate the opportunity cost of a typed page as she increases her time typing and decreases time creating a Web page. (b) Mary takes 4 minutes to make a sandwich and 6 minutes to mix a cocktail. Her sister Ash takes 4 minutes to make a sandwich and 4 minutes to mix a cocktail. Calculate each sister's opportunity cost. Which of the two sisters has an absolute advantage in making sandwiches? In mixing cocktails? Which of the two has a comparative advantage in making sandwiches? In mixing cocktails? [01] (c) "If an economy is producing at a point on its PPF, it has achieved allocative efficiency." True or false? Explain. [01] (d) What is the relationship between the bowed out shape of the production possibilities frontier and the increasing opportunity cost of a good as more of it is produced?