In a Krugman type of autarky environment, one was able to derive two equilibrium conditions. In particular, optimal prices charged by firms can be represented by: where els consumption per variety and is the productivity. At the same time, from free-entry, the average revenue being equal to the average cost can by represented by: 8=4+1 where is the total labor supply and f a fixed cost of production. What should happen to the average firm size in this economy when free-trade is allowed with an identical foreign economy? Average firm size doesn't change. Not enough information to answer. Average firm size increases. Average firm size decreases. 10000
Q: Pat earns $25,000 per year (after taxes), and Pat's spouse, Chris, earns $35,000 (after taxes). They…
A: Opportunity cost refers to the cost involved if an opportunity is foregone. In simpler words, it…
Q: Given a demand curve of P = 165 - 6Qd and supply of P = 65 + 5Qs, find the equilibrium price (Pe),…
A: The demand curve shows an inverse relationship between price and quantity demanded, ceteris…
Q: Consider a city with its boundary mapped onto quadrant I on the cartesian plane. Let x be distance…
A: Consumer preference:It is related to the preference of consumers over a different bundle of goods.…
Q: 2.6. Class size and student performance. Economic research shows that primary school children in…
A: Correlation and causation are concepts used in statistics and research to describe the relationship…
Q: The current US/Mexican exchange rates are 0.0497 - 0.0501 $/peso. Assume 2-year interest rates in…
A: A forward exchange rate is the exchange rate at which two parties agree to exchange one currency for…
Q: Refer to the following table when answering the following questions. Table 2.4: U.S. and Eurozone…
A: Nominal GDP is the current year's GDP and includes the total value of goods and services produced at…
Q: Can you answer the problem B, please?
A: Complementary goods are products or services that tend to be consumed together because they enhance…
Q: Home has 1,200 units of labor available. It can produce two goods, apples and bananas. The unit…
A: The concept of the production possibility frontier shows the maximum number of two items that can be…
Q: A basket of goods for a given consumer includes two goods, X and Z. Consumer income is equal to…
A: Budget constraint: given the price of 2 goods and consumer’s income. The budget constraint shows…
Q: The demand and supply of movie tickets are given by Q D = 10 – 2P and Q S = 2P – 6, where P is the…
A: Demand equation for movie tickets: Supply equation for movie tickets: The equilibrium price of a…
Q: 5) How many people are unemployed if the employment ratio is 75%, there are 90 million people-…
A: The employment ratio is defined as the overall employment level in the economy divided by the labor…
Q: Classify each of the following as fixed or variable costs and give a brief explanation for your…
A: The study and evaluation of corporate financial concerns using abstract economic concepts and ideas…
Q: Marginal Product of labour table
A: Diminishing marginal returns is a concept in economics that states that as more of a variable input…
Q: Price (dollars per gallon) 5.50 5.00 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0 DNovember Djuly…
A: Consumer surplus is the area below the demand curve and above the equilibrium price level. Producer…
Q: Use the letters in the graph below to answer this question letter or letters representing each area…
A: Consumer surplus is the area below demand and above price. Producer surplus is the area below price…
Q: Recall that the goal of the Affordable Care Act (also known as Obamacare) legislation was to get…
A: Note: The given question has been answered from the perspective of 'Health Economics'.The ACA…
Q: Which of the following would result from a decrease in supply? A. a decrease in the equilibrium…
A: "As per our policy, we provide you with the solution to the first question. Kindly raise the…
Q: You are employed at an Economics consulting firm called Eco Xcel. You have been approached by a…
A: Monetary policy refers to the management of a country's money supply and interest rates by its…
Q: a) What is the fixed cost? ✔ [Select] 300 200 250 c) If the merchandise is v 500 would cost, based…
A: Fixed Costs are costs that do not change with the level of output. They are incurred even if the…
Q: Using the graph, complete the table that follows by indicating whether each statement is true or…
A: Price elasticity of supply shows how much sensitive is quantity supplied to price change.When…
Q: The total value of a loaf of bread is... TABLE 1.1 Farmer sells wheat to miller Miller sells flour…
A: The value-added method is an approach used in economics to measure the contribution of each sector…
Q: If Panama is open to international trade in lemons without any restrictions, it will import Suppose…
A: An economy imports a commodity when its domestic supply of the good is unable to meet the domestic…
Q: 2 The Slutsky equation For each of the following utility functions, U (₁,2)= min{x1, x2} and U(₁, 2)…
A: The Slutsky equation in economics, named after Eugen Slutsky, relates changes in Marshallian…
Q: The following graph shows the long-run supply curve for pistachios. Place the orange line (square…
A: The Price Elasticity of Supply (PES) measures how sensitive the quantity supplied of a good or…
Q: You are graphing Mickey's indifference curve over steak and chicken. He likes both of them and his…
A: All commodity bundles with the same utility level are shown by the utility function. A graphical…
Q: 2. Using a graph, explain how a pure monopolist chooses its profit maximizing level of output and…
A: The profit-maximizing output for each firm is MR = MC. For a monopolist to produce a lower quantity,…
Q: The following table gives the joint probability distribution between employment status and college…
A: Unemployment is a situation in which individuals in a society are willing to work but not get any…
Q: Accommodation policy refers to the purchase or sale of domestic financial assets by the Central bank…
A: A government is a governing authority or a system of institutions and individuals responsible for…
Q: If the rate of inflation is 2%, what are the before-tax real interest rate and your after-tax rate…
A: The Fischer equation defines the relationship between the real interest rate , nominal interest rate…
Q: A Clinical Laboratory plans to build a waste water management installation (IPAL) independently. For…
A: Equivalent Uniform Annual Cost (EUAC) is a financial metric used in various fields, including…
Q: The measurement framework should cover the goals and are cost effective. A)Field Breadth 3)Field…
A: The three dimensions of a measurement framework are:Field breadth refers to the range of activities…
Q: 20 18 16 14 12 10 8 6 4 2 10 20 30 40 50 60 70 80 quantity Refer to Figure 6-6. If the government…
A: Price floor refers to a legal minimum price that can be charged for a good. It is set above the…
Q: 1. You have borrowed $40,000 at an interest rate of 11%. Equal payments will be made over a…
A: We can use the following formula to calculate the annual payment:Annual payment = [principal * (1 +…
Q: Suppose there exist two imaginary countnes, Denali and Sequoia. Their labor forces are each capable…
A: Comparative Advantage refers to the services that have a lower opportunity cost in comparison to…
Q: When a competitive firm sees losses because the product price falls below the minimum average cost…
A: Economies of scale refer to the cost advantages that an organization or business entity can achieve…
Q: No 1 12 . 3 4 15 6 7 Manufactured a. Point 1 to point 2 b. Point 2 to point 3 0 20 40 60 80 100 120…
A: Production possibility frontier is defined as the various production goods or commodities at the…
Q: television sellers expect the prices of televisions to fall in the future, we are likely to see the…
A: Supply refers to the quantity supplied by the producer to the public. There exists a positive…
Q: PRICE (Dollars per unit) 24 20 16 12 00 4 100 Social Cost Supply Demand 200 300 400 500 600 QUANTITY…
A: The external cost is an activity that affects other parties. It may be cost or benefit to the…
Q: D Question 11 A market is said to be in disequilibrium if it exhibits either a surplus or a…
A: A market is said to be in disequilibrium if it exhibits either a surplus or a shortage.A surplus…
Q: d) What price will maximize the profit?
A: Suppose a company has fixed costs of $28,000 and variable cost per unit of dollars, where x is the…
Q: Suppose the market for wooden picnic benches experiences the following event: The price of plastic…
A: When the price of a substitute good decreases, the demand for the original good decreases. This is…
Q: 4. Effects of a tariff on international trade The following graph shows the domestic supply of and…
A: When country open for trade, it means it allows products of other countries to enter to its domestic…
Q: Why does the failure to adjust the poverty line for regional differences in living costs lead to an…
A: The failure to adjust the poverty line for regional differences in living costs can lead to an…
Q: Consider the following quadratic (potential cost) function: c(w, y) = [/₁1wi +√22w² +2/12w1/²w2/2]y,…
A: Cost:It is the total expenditure incurred in the process of production. Cost has two types:fixed…
Q: P3 N° Price Level A Po 0 FIGURE 29-1 E3 E2 N E1 Eo Y" Real GDP AS3 AS₂ AS₁ Select one: O a an annual…
A: AD-AS model is a macroeconomic model that shows the relationship between the real GDP and price…
Q: Find the present worth in year 0 for the cash flows shown. Let/= 20.00% per year. (Round the final…
A: Present worth, also known as present value, is the current monetary value of future cash flows or…
Q: The actual burden of a tax Is distributed independently of relative elasticities of supply and…
A: Elasticities also have an impact on fiscal and monetary policies, allowing policymakers to better…
Q: Consider a hypothetical closed economy in which there are no income taxes. If households spend $0.80…
A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,…
Q: Calculate the percentage of people who have been unemployed for twenty-seven weeks or more. Enter…
A: Umemployed people are those who have been actively looking for jobs but are unable to find the same…
Q: JenStar has a single product with a sales price of $22 and whose variable cost is $10 per unit. The…
A: Industrial economics is the study and appraisal of business financial issues utilising abstract…
13
Step by step
Solved in 4 steps
- An industry has the following cost function: C(X, Y ) = 1500+20X +20Y . Market demands for the 2 goods are given by PX =80−X, and PY =140−2Y Suppose the government wished to use two part tariffs in these markets, and suppose further that two part tariffs are feasible. Imagine that there are 10 consumer in each market. Solve for a set of two part tariffs (one for each martket) that pay the firm zero profits in total, yet achieves efficiency.Carl and Simon are two pumpkin growers who are the only sellers of pumpkins at the market. The demand function for pumpkins is Q = 16,400 - 400P, where Q is the total number of pumpkins that reach the market and P is the price of pumpkins. Suppose further that each farmer has a constant marginal cost of $1 for each pumpkin produced. Assume that Carl can tell, by looking at Simon's fields, how many pumpkins Simon planted and how many Simon will harvest in the fall. (Suppose that Simon will sell every pumpkin that he produces.) Therefore, Carl sees how many pumpkins Simon is actually going to sell this year. Carl has this information before he makes his own decision about how many to plant. If Simon plants enough pumpkins to yield Qs this year, then Carl knows that the profit maximising amount to produce this year is QCarl = Group of answer choices a. 8,000 - Qs/2. b. 16,400 - 400Qs. c. 16,400 - 800Qs. d. 4,000 - Qs/2. e. 12,000 - QsCOURSE: MICROECONOMICS - Stackelberg ModelIn a given market good there are only 2 firms that satisfy the demand, and their respective total cost functions are: CTi = 400 and the demand that is estimated is P = 120 - 2QIf the exception variable of both firms is the quantity they will produce, such that the decisions to produce are made sequentially firm number 1 will be the leader who decides the quantity to produce and firm number 2 (follower) decides based on the production of firm number 1, we ask:(a) quantity produced by each firm and its equilibrium price in the market.(b) Profit of each company at equilibrium and (c) Graph your results
- Use the following to answer questions (1) - (14): Suppose the local market for flat glass, considered a homogeneous product, consists of two firms, A and B. The market demand is given as: Q = 40 - 2P, where Q is the market quantity and P is the price. A's total cost (TC) is: TC, = 6°q4, where q, is the quantity produced and sold by A B's total cost (TC3) is: TC, = 8q2, where qg is the quantity produced and sold by B [1] The market structure these two firms operate in is definitely not monopolistic competition. A. True В. False [2] Behaving as Cournot competitors, at the Nash equilibrium A produces a quantity closest in value to: A. 9 В. 11 C. 13 D. 15 [3] Behaving as Cournot competitors, at the Nash equilibrium the market quantity is closest in value to: A. 10 В. 13 С. 17 D. 20 [4] Behaving as Cournot competitors, at the Nash equilibrium the market price is closest in value to: A. 9 В. 11 C. 15 D. 19 [5] Behaving as Cournot competitors, at the Nash equilibrium B's profit is closest in…Consider the market for Atlantic salmon. Petuna, Tasmania’s smallest salmon farm, and Huon Aquaculture, a large corporate supplier, are both producers of Atlantic salmon. The marginal cost curves for both firms are shown in the graph below: If the market price is $13 per kilo of salmon, how many kilos of salmon would Petuna supply? What about Huon Aquaculture? How many total kilos would they collectively supply? Is this allocation the most productively efficient way to produce this quantity of salmon? i will give thumbs up thanksCarl and Simon are two pumpkin growers who are the only sellers of pumpkins at the market. The demand function for pumpkins is Q = 16,400 – 400P, where Q is the total number of pumpkins that reach the market and P is the price of pumpkins. Suppose further that each farmer has a constant marginal cost of $1 for each pumpkin produced. Assume that Carl can tell, by looking at Simon's fields, how many pumpkins Simon planted and how many Simon will harvest in the fall. (Suppose that Simon will sell every pumpkin that he produces.) Therefore, Carl sees how many pumpkins Simon is actually going to sell this year. Carl has this information before he makes his own decision about how many to plant. If Simon plants enough pumpkins to yield Qs this year, then Carl knows that the profit maximising amount to produce this year is Qcarl = O 8,000 – Qs/2. O 16,400 – 400Qs. O 16,400 – 800Qs. O 4,000 – Qs/2. O 12,000 – Qs.
- d) Explain what is meant by the term Paretooptimality.Explain whether the Pareto criterion is an efficiency criterion or a distribution criterion.Is the equilibrium of free competition Paretooptimal? p=320– 2x, e) Market demand for an item is provided by where p is the price of the p= 20+x. item and x is traded quantity. The market supply curve is provided by Find the market equilibrium during free competition and calculate the consumer surplus, producer surplus and socio-economic surplus.Illustrates graphically.Suppose there are only two firms in a competitive market for a good. Firm 1's marginal cost curve is given by MC = 2.5 +0.5Q and the equation of 4+Q³. What is the equation of the - firm 2's marginal cost curve is MC supply function for this market? - a) MC = 6.5 +1.5Q⁹ b) MC = 0.33Q⁹ +3 c) Q³ = 3p - 9 d) P = 6.5 +1.5QsConsider a country that produces computers (C) and food (F) using capital (K) and labor (L). Both industries are perfectly competitive. The factors of production are complements. As a result, unit factor requirements are fixed and given by: aKc = 3, akr = 1, aLc = 2 and ALF 4. Suppose that this economy has 100 units of capital and 150 workers. (c) Suppose that the world price of computers is $16 and the world price of food is $12. Assume that the Home country produces both goods. What are the free trade factor price levels W and R?
- Allocative efficiency is an economic concept regarding efficiency at the social or societal level. It refers to producing the optimal quantity of some output, the quantity where the marginal benefit to society of one more unit just equals the marginal cost. The rule of profit maximization in a world of perfect competition was for each firm to produce the quantity of output where P = MC, where the price (P) is a measure of how much buyers value the good and the marginal cost (MC) is a measure of what marginal units cost society to produce. A monopolist... Group of answer choices Would try to achieve allocative efficiency to compete with the other firms who own a larger market share. Will prefer to operate where price < average total cost. Has no motivation to operate at an output level where P=MC, once a barrier is in place and no longer has to worry about competition. Will experience greater profits if it sets prices equal to average total cost.Suppose a typical (representative) corn farm has a short run production technology which results in the outcome of U-shaped Average Variable Cost (AVC), Average Total Cost (ATC), and Marginal Cost (MC). Further, suppose this firm sells its product in a market where the price of the good is determined by the interaction of market Demand and Supply. Because an individual firm is very small compared to the rest of the market, we treat the market price as the price given to the firm, and the individual firm cannot impact that price. assume we are in the Short Run for this firm. In graphing, put $ on the vertical axis and lower-case q (firm output) on the horizontal axis. Start with the AFC0, AVC0, ATC0, and MC0 curves . show shifts in any of the cost curves, reflecting the higher cost of land (keeping in mind that this higher cost is independent of how much or how little corn is actually produced) and labeling the changed cost curves with a subscript 1. On the graph with $ on the…Consider a lake found in the town of Center Barnstead, and then answer the questions that follow. The town has a kayak rental whose visitors use the lake for recreation. The town also has a research facility that dumps industrial waste into the lake. This pollutes the lake and makes it a less desirable vacation destination. That is, the research facility's waste decreases the kayak rental's economic profit. Suppose that the research facility could use a different production method that involves recycling water. This would reduce the pollution in the lake to levels safe for recreation, and the kayak rental would no longer be affected. If the research facility uses the recycling method, then the research facility's economic profit is $1,100 per week, and the kayak rental's economic profit is $2,600 per week. If the research facility does not use the recycling method, then the research facility's economic profit is $1,800 per week, and the kayak rental's economic profit is $1,500 per…