Equation that represents the new market supply curve

Assignment Help Microeconomics
Reference no: EM131021755

Quiz 2-

1. Consider the market for bananas that is initially described by the following equations where Q is the quantity of bananas and P is the price per unit of bananas:

Market Demand: Q = 50 - (1/2)P

Market Supply: Q = (1/6)P - 20/6

Suppose that something happens in this market and after all adjustment to this event, the market for bananas finds itself at a new equilibrium price of $60 and a new equilibrium quantity of 6.7 units of bananas. Which of the following (circle your preferred answer) is most likely the cause of this new equilibrium?

a. The market demand curve shifted.

b. The market supply curve shifted.

2. Suppose the market for coffee beans initially has ten identical producers. The initial market supply curve is given by the following equation where Q is the quantity of pounds of coffee beans supplied and P is the price per pound of coffee beans:

Initial Market Supply Curve: Q = 50P - 100

Suppose that two of these firms exit the coffee bean market and you have been asked to provide an equation that represents the new market supply curve given the exit of these two firms. You have also been asked to write this new market supply curve in slope intercept form. Show the work you did to find this new market supply curve in the space below.

3. Consider the market for pencils. Suppose this market is initially in equilibrium. Then, at the same time suppose that the price of graphite, a critical input used in the production of pencils increases and the number of school age children increases. Given this information and holding everything else constant, what do you predict will happen to the equilibrium price and equilibrium quantity in the market for pencils? Be specific in describing any shifts and/or movements in this market.

4. Suppose the domestic market for pens in Nicia, a small economy, is described by the following equations where P is the price per pen and Q is the quantity of pens:

Domestic Demand: Q = 540 - 90P

Domestic Supply: Q = 45P

Suppose that the world price of pens is $1 per pen.

a. Given the above information, if the pen market in Nicia opens to trade how many pens will be exported or imported by Nicia? Make sure your answer identifies whether Nicia will import or export pens.

b. Given the above information, if the market for pens in Nicia opens to trade, what will be the change in consumer surplus compared to the level of consumer surplus when this market was closed to trade? Show how you found your answer.

c. Suppose that Nicia opens this market to trade while simultaneously implementing an import quota of 135 pens. Given this information, what is the value of the deadweight loss in this market due to the imposition of this quota? Show how you found your answer to get full credit.

Reference no: EM131021755

Questions Cloud

The firm needs to plow back its earnings to fuel growth : Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next eight years, because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $15.25 per share 9 years..
The evolution of the uses and delivery of electricity : Conclusion: Tell me what you have told me. This is your last opportunity to make your point, answer your question, or argue a perspective.
What will be the effect on his profit of grooming : Stephen runs a pet salon. He is currently grooming 125 dogs per week. If instead of grooming 125 dogs, he grooms 126 dogs, he will add $68.50 to his costs and $60.00 to his revenues. What will be the effect on his profit of grooming 126 dogs inst..
Fundamentals of corporate finance tenth edition : Review the material in Chapter 23 on hedging with swap contracts and the role of the swap dealer. Then refer to Figure 23.6 on page 764 in your course text Fundamentals of Corporate Finance tenth edition.
Equation that represents the new market supply curve : Suppose that two of these firms exit the coffee bean market and you have been asked to provide an equation that represents the new market supply curve given the exit of these two firms. You have also been asked to write this new market supply curv..
Use rounded numbers in intermediate calculations : You expect to receive $41,000 at graduation in two years. You plan on investing it at 9.25 percent until you have $176,000. Required: How long will you wait from now? (Enter rounded answer as directed, but do not use rounded numbers in intermediate c..
What meaning they may have in context of the topic : Share a link to a website that contains a graph. Discuss the critical points, increasing sections, decreasing sections, etc. and what meaning they may have in context of the topic on the website.
Shift in patient care delivery model in inpatient facilities : Discuss how the CMS reimbursement rules for never events required a shift in the patient care delivery model in inpatient facilities.
What is the probability that the mean price for a sample : Which, if any, of the sample sizes in parts (a), (b), and (c) would you recommend to have at least a .95 probability that the sample mean is within $8 of the population mean?

Reviews

Write a Review

 

Microeconomics Questions & Answers

  Joseph stiglitz''s book details his various discontents

Joseph Stiglitz's book details his various "discontents" with the way the globalization process has been aided and abetted by international organizations dedicated to the economic transformation of the world economy, such as the World Bank and ..

  How can we measure the opportunity cost of producing a good

how can we measure the opportunity cost of producing a good? using a bowed outward production possibilities curve

  Illustrate that any action which includes vote for ones

in the system of approval voting each voter may vote for as many candidates as she wishes. if there are three

  Productivity is an important measure of economic growth

Productivity is an important measure of economic growth.  However, it can be misleading if taken as a measure by itself.  For example, typically, when economic growth is slowed or declines (recession), business will decrease the number of workers, wh..

  Design an economic policy solution to the problem

Design an economic policy solution to the problem. Analyze the economic theory used to complete the policy solution and determine the impact on the appropriate stakeholders.

  Find the subgame perfect nash equilibrium using induction

There are 6 tokens on the table. Two players alternate removing some of the tokens. In each move any player can either remove exactly one or exactly two tokens. Whoever removes the last token is the winner

  Second possibility is purchasing a meal at school cafeteria

1. A student has a budget of $200 for their meals outside of the home per week. One possibility is purchasing a meal at a restaurant, which  we will call x1, and which costs $20, and a second possibility is purchasing a meal at the school cafeteria, ..

  Specify the bounds of output and price for the function

Assume a firm has the following total cost function TC = 10Q2- 25Q + 150- Specify the bounds of output and price for the function.

  What stepsactions would athe n organization take to find

in supply management one component to explore is how an organizations supply chain helps to achieve a strategic

  How the profits of firms will increase

The cost of labor goes down, the profits of firms will increase, and short-run aggregate supply will shift to the right.

  Estimating supply curves

Compute the quantity supplied by each firm at prices of $1, $1.50, and $2. What is the minimum price necessary for each individual firm to supply output?

  A firm has a perfectly competitive production function

Suppose a firm has a perfectly competitive production function: q=f(K,L)=2(K^1/2)+2(L^1/2). Suppose the price of capital is r and the price of labor is w. 1) The firm's cost minimization problem can be wrtten as: 2) Find the conditional input demand ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd