a) The inverse demand and supply functions for a commodity are Pa = 400 – 0.3Q P, = 40 + 0.3Q Where P shows the market price and Q shows the quantity. Subscript d represents demand and subscript s represents the supply. Calculate the equilibrium price and quantity, P* and Q".
a) The inverse demand and supply functions for a commodity are Pa = 400 – 0.3Q P, = 40 + 0.3Q Where P shows the market price and Q shows the quantity. Subscript d represents demand and subscript s represents the supply. Calculate the equilibrium price and quantity, P* and Q".
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Question One
a) The inverse demand and supply functions for a commodity are
Pa = 400 – 0.3Q
P, = 40 + 0.3Q
Where P shows the market price and Q shows the quantity. Subscript d represents demand and
subscript s represents the supply. Calculate the equilibrium price and quantity, P* and Q*.
b) Given the following national income model
Y = C +1+ G
C = co + c,Ya
Ya = Y – T
T = to + t,Y
1 = l,
G = Go
Co = 100; I, = 80; c, = 0.8; Go = 300; t, = 250; t = 0.2
i) Name the endogenous and exogenous variables in the model
ii)Find the equilibrium income, Ỹ](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6cf74c59-b4fe-4477-8e27-cfe620151b4f%2Fd9499233-b1dd-4144-a371-ba630ce2b4fb%2Fzjdmvjn_processed.png&w=3840&q=75)
Transcribed Image Text:Question One
a) The inverse demand and supply functions for a commodity are
Pa = 400 – 0.3Q
P, = 40 + 0.3Q
Where P shows the market price and Q shows the quantity. Subscript d represents demand and
subscript s represents the supply. Calculate the equilibrium price and quantity, P* and Q*.
b) Given the following national income model
Y = C +1+ G
C = co + c,Ya
Ya = Y – T
T = to + t,Y
1 = l,
G = Go
Co = 100; I, = 80; c, = 0.8; Go = 300; t, = 250; t = 0.2
i) Name the endogenous and exogenous variables in the model
ii)Find the equilibrium income, Ỹ
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