Monday, April 8, 2019

Economics Practice Problems Essay Example for Free

Economics answer Problems Essay1. Which of the following would most likely source equilibrium quantity and wrong of x to elevator?(a)a stick in income when the income elasticity of bring for x is positive Wrong. This will cause a regurgitate in demand and thus a fall in quantity. (b)a fall in the price of completing product yCorrect. A fall in a complementary product will cause a rise in demand for that product y and thus a rise in demand of product x (see graph). (c)a fall in the price of substitute product ZWrong. A fall in a substitute product will cause an increase in the demand for product Z and thus a fall in the demand for product x. (d)an increase in the cost of producing xWrong. The increase in production cost will decrease supply (see graph).(e)a fall in the price of product A which is jointly produced with x Wrong. A fall in price of a jointly produced product will give the incentive to produce more than A. If this incentivizes the producer to as well as incr ease the supply of x, the effect would be opposite as in (d) less price and more quantity.2. Which of the following is not characteristic of a cartel situation?(a)While disagreement over production quotas may occur, once set, there is little incentive for cheating. Correct answer. In a cartel there ar incentives to cheat (all other are characteristics of a cartel). (b)There is an incentive for some producers not to join.(c)Entry of new producers is a scourge to the cartels viability. (d)Long-run demand elasticity can pose an obstacle to success. (e)Output must be less than the competitive cheek for the cartel to be effective.

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