Suppose the market for potatoes can be expressed as follows: Supply: QS = -20 + 10p Demand: QD = 400 - 20p Solve for the equilibrium price and quantity
What will be an ideal response?
Equate the RHS of the supply equation to the RHS of the demand equation: -20 + 10p = 400 - 20p.
Rearrange: 30p = 420 or p = 14. Plug this into either S or D to get Q: Q = 400 - 20(14 ) = 120.
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The table below shows the utility schedule for a consumer of candy bars. Candy Bars ConsumedTotal Utility001529312414515615713Marginal utility becomes negative with the consumption of the
A. sixth candy bar. B. seventh candy bar. C. fifth candy bar. D. second candy bar.
Refer to Figure 15-5. If the monopolist charges price P* for output Q*, in order to maximize profit or minimize loss in the short run, it should
A) continue to produce because price is greater than average variable cost. B) shut down because price is greater than marginal cost. C) continue to produce because a monopolist always earns a profit. D) shut down because price is less than average total cost.
If the inverse demand curve a monopoly faces is p = 100 - 2Q, MC is constant at 16, and the government imposes an $8 per unit specific tax on the monopoly, the deadweight loss due to both the monopoly and the tax is
A) $529. B) $1332. C) $1764. D) $441.
Which of the following statements is true?
a. Specialization and trade along the lines of comparative advantage allows nations to consume more than if they were to produce just for themselves. b. Free trade theory suggests that when trade takes place any gains made by one nation comes at the expense of another. c. According to the theory of comparative advantage, a nation should specialize in the production of those goods for which it has an absolute advantage. d. All of these.