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.

Economics

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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

Economics

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

Economics

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.

Economics

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?

Economics