11) There are two closely related crops, X and Y, with the following demand functions QX = 180 - 2PX + PY and QY = 150 + PX - PY where QX is the quantity of X, PX is the price of X, QY is the quantity of Y, and PY is the price of Y. These two crops are grown in two widely separated countries so there is no interrelationship between the supply curves. The short-run perfectly inelastic supply for X is 150 while the short-run perfectly inelastic supply for Y is 100. In equilibrium, the prices are A) PX = 80, PY = 130 B) PX = 40, PY = 65 C) PX = 60, PY = 120 D) PX = 30, PY = 80
11) There are two closely related crops, X and Y, with the following demand functions
QX = 180 - 2PX + PY and QY = 150 + PX - PY where QX is the quantity of X, PX is the
A) PX = 80, PY = 130
B) PX = 40, PY = 65
C) PX = 60, PY = 120
D) PX = 30, PY = 80
12) There are two closely related crops, X and Y, with the following demand functions QX = 180 - 2PX + PY and QY = 150 + PX - PY where QX is the quantity of X, PX is the price of X, QY is the quantity of Y, and PY is the price of Y. These two crops are grown in two widely separated countries so there is no interrelationship between the supply curves. The short-run perfectly inelastic supply for X is 200 while the short-run perfectly inelastic supply for Y is 100. In equilibrium, the prices are
A) PX = 30, PY = 80
B) PX = 40, PY = 60
C) PX = 60, PY = 120
D) PX = 80, PY = 130
13) Employers in a city must pay a specific tax of $t per hour worked by their employees while employers in the suburbs of the city do not have an employment tax. What does a general equilibrium approach predict regarding the wages and employment of both the city and suburban workers if the city decides to substantially reduce their employment tax rate?
A) Wages will increase in the city, but not in the suburbs, and employment will increase in both.
B) Wages will increase in both the city and the suburbs, but employment will fall in both.
C) Wages will increase in both the city and suburbs, employment will increase in the city, but decrease in the suburbs.
D) Wages will increase in both the city and the suburbs, employment will decrease in the city, but increase in the suburbs.
For the following, please answer "True" or "False" and explain why.
14) The effects of a price change are always understated by a partial-equilibrium analysis when compared to a general-equilibrium analysis.
15) Employing a general equilibrium approach, describe the effect of a new law that prohibits steel imports.
16) Suppose that the minimum wage covers all sectors of the economy; however, for unionized laborers, the minimum wage is ineffective. That is, the union wage is already above the minimum wage. Analyze the impact of an increase in the minimum wage on both the unionized and non-unionized labor markets. (Assume that the higher minimum wage is still ineffective in the unionized sector and that union and nonunion labor are substitutable.)
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