Law of Supply and Demand
What will be an ideal response?
The claim that the price of any good adjusts to bring the quantity supplied and quantity demanded for that good into balance.
You might also like to view...
The above figure shows the U.S. market for replacement cell phone batteries. When there is no international trade, the equilibrium price is ________ per battery and when there is international trade the equilibrium price is ________ per battery
A) $16; $14 B) $12; $16 C) $10; $14 D) $12; $14 E) $14; $10
The cost of producing each bottle of a certain brand of shampoo is $0.25. If the market for shampoo is monopolistically competitive and demand for shampoo is inelastic, a manufacturer who charges $0.35 for each bottle will ________
A) shut down production in the short run B) exit the industry in the long run C) earn an economic profit of $0.10 per bottle D) earn a total revenue of $0.10 per bottle
A hotel with market power charges customers who check in before 5:00 pm more than those who check in after 5:00 pm. Those who check in early are much more likely to use the hotel's pool
Explain why this price difference may not be price discrimination.
To estimate dynamic causal effects, your textbook presents the distributed lag regression model, the autoregressive distributed lag model, and a quasi-difference representation of the distributed lag model with autoregressive errors
Using a simple example, such as a distributed lag model with only the current and past value of X and an AR(1) model for the error term, discuss how these models are related. In each case suggest estimation methods and evaluate the relative merit in using one rather than the other. What will be an ideal response?