In competitive markets, we know that: P = MWTP P = MC MC = AC P = Min AC Which result(s) implies that the outcome is socially optimal? Briefly explain.
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- In his landmark book on economics, Human Action, Economist Ludwig von Mises describes the consumer as the “captain of the ship.” Write a short essay addressing Mises’s claim. Is he correct? Why or why not? How does what Mises claim correspond to what we know about the laws of supply and demand?Use the following graph to identify the equilibrium at the social optimum (Es), the competitive market equilibrium (EM), the quantity produced at the social optimum (Qs), and the quantity produced at the competitive market equilibrium (QM). Price S social Sinternal Dinternal quantity A Es BEM c) Qs D QMWith the information in the picture identify the determinant(s) and explain the shift in market equilibrium.
- Suppose the market for hats is competitive, with many small producers of hats, each of them unable to affect the market price of hats, and many consumers. And suppose there is an increase in the demand for hats. (a) How would an increase in demand affect the demand curve and supply curve for hats; and how would it change the equilibrium price and quantity of hats sold? (b) The Core Economics text observes that "price-taking is no longer a “Nash equilibrium". What is a “Nash equilibrium"? And why is price-taking no longer one? (c) When the market is not in equilibrium, it is said that the short side of the market dominates. What does this mean? (d) What are "economic rents"? How does "rent seeking" enter the process of price adjustment? (e) In what ways might the market for hats differ from "the labour market"?A city passes a law that automobile prices may not increase. The auto market is currently in equilibrium. What will happen in that market if costs of producing autos increase? Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a More than the allocatively efficient amount will be produced. b Less than the allocatively efficient amount will be produced. c The allocatively efficient amount will be produced but there will be a shortage. d The allocatively efficient amount will be produced but there will be a surplus.The graph shows the market for smartphones . On the graph, draw a point at the market equilibrium and label it 1. Now draw a curve to illustrate what happens in the market for smartphones if more firms produce smartphones while all other influences on the market remain the same. Label the curve S1 Draw a point at the new market equilibrium and label it 2. >>> Draw only the objects specified in the question.
- Use the following graph to answer the question below. Price $1.60 1.00 .50 0 130 200 Quantity 290 MC MB The quantity where marginal benefit equals marginal cost isDraw a graph of a competitive market in equilibrium, and illustrate a decrease in Supply. Carefully label everything. Use the "E" labels to label the equilibrium points. As a result of the shift, what will happen to price and quantity? Carefully explain the mechanism that causes price to adjust after the shift, and illustrate it on your graph. Carefully label everything on the graph. Use the boxes below to type your answer. If you reach the line that divides the left side from the right side, start a new line in the next box down. If you do not use all of the boxes, put an "x" in the boxes you do not use.Due to the government's program for developing alternative fuels, the demand for ethanol has increased dramatically. Ethanol is made from corn. Corn is also used as a feed for hogs. Simultaneously, many more cases of mad cow disease have been discovered in the United States. Assume that pork and beef are substitutes in consumption, but not in production. As a result of these two changes, what will happen to the price and output of pork? Briefly explain.
- Is The following graph plots the supply and demand curves in the market for VR headsets. Use the black point (plus symbol) to indicate the equilibrium price and quantity of VR headsets. Then use the green point (triangle symbol) to fill the area representing consumer surplus, and use the purple point (diamond symbol) to fill the area representing producer surplus. PRICE (Dollars per headset) 400 300 320 200 240 200 160 120 BO 40 0 0 Demand Supply 75 400 525 600 676 750 150 225 300 375 QUANTITY (Millions of headsets) Total surplus in this market is $ million, Equilibrium A Consumer Surplus ◊ Producer Surplus Bas & Pant course 0xA graph shows the market for hot dogs in Chicago, where there are over 1,000 stands at any given moment. Suppose the price of sausage casing, a major ingredient in hot dogs, suddenly increases. would the supply curve on the graph shift to the left or to the right? would the demand curve on the graph shift to the left or to the right?Imagine that you are buying Lego bricks. The number of bricks you are willing to buy is determined by the market price of bricks. Your willingness to buy is defined by the following: You are willing to buy 1 brick if the price is at or below $30 You are willing to buy 2 bricks if the price is at or below $25 You are willing to buy 3 bricks if the price is at or below $20 You are willing to buy 4 bricks if the price is at or below $15 What is your consumer surplus if the market price of bricks is $23? Assume that there are enough sellers available to sell as many as you want to buy at that price. Enter the number below. Do not include the “$” sign.