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Equilibrium in the Kiwifruit Market. Consumers are willing to pay 10 cents for a sour kiwifruit and 30 cents for a sweet kiwifruit. The minimum supply price for sour kiwifruit is 6 cents and the minimum supply price for sweet kiwifruit is 18 cents. The slope of each supply curve is 1 cent per thousand kiwifruit. (Related to Application 2 on page 624.)
a. Suppose consumers initially expect a 50 50 mix of sweet and sour kiwifruits. Is this an equilibrium? Illustrate with a graph.
b. Suppose consumers are pessimistic, expecting all sour kiwifruit. Is this an equilibrium? Illustrate with a graph. What is the price of kiwifruit?
c. Suppose the state outlaws sour kiwifruit, and they disappear from the market. What happens to the equilibrium price of kiwifruit? What is the equilibrium quantity of sweet kiwifruit?
Assume Firm Y's production function is given by the following Cobb Douglas equation: Q = 0.5 x L0.6 x K0.5 where L denotes labor and K denotes capital. a. Does the production function exhibit increasing, decreasing or constant returns to scale.
Evaluate their effectiveness with respect to certain areas within your discipline.
If in an economy a $150 billion increase in investment spending creates $150 billion of new income int he first round of the multiplier process and $105 billion in the second round, the multiplier and the marginal propensity to consume will be
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Consider a perfectly competitive market in which the market demand curveis Dd =10-Pd andsupplyisQs =2Ps. a) Find the equilibrium price and quantity on this market. b) Suppose the govt imposes the price ceiuling of 3$ per unit. How much is supplied
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What is the price elasticity of demand for bananas?
The following table is the pay off matrix for zero sum game. Estimate the each players dominated strategy of the following zero sum game?
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