Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 12, Problem 2.7P
To determine
The effect of income rise on output, price, and employment.
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Analyse, in two different partial equilibrium models, what the implications of reducing each of these two different forms of food waste would be. Assume perfect competition in both cases. Illustrate your answers graphically.
1) In a rich country, suppose that improved storage technology at the household level means that households can, at no extra cost, reduce their food waste compared to current levels. What will happen to market demand, market supply, and the equilibrium price in the short run as a result? What will the new long run equilibrium look like?
2) In a poor country, suppose that improved storage technology at the producer level means that producers can, at no extra cost, reduce their food waste compared to current levels. What will happen to market demand, market supply, and the equilibrium price in the short run as a result? What will the new long run equilibrium look like?
The blue curve on the following graph represents the demand curve facing a firm that can set its own prices.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 8, 16, 20, 24, 32, and 40 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results.
Calculate the total revenue if the firm produces 8 versus 7 units. Then, calculate the marginal revenue of the eighth unit produced.
The marginal revenue of the eighth unit produced is
.
Calculate the total revenue if the firm produces 16 versus 15 units. Then,…
Use the following general linear supply function:
Qs = 40 + 6P - 8PI + 10F
where Qs is the quantity supplied of the good, P is the price of the good, PI is the price of an input, and F is the number of firms producing the good.If PI = $20 and F = 60 what is the equation of the supply function?Group of answer choices
Qs = 480 + 6P
Qs = 40 + 8P
P = 480 + 6Qs
Qs = 400 + 6P
none of the above
Chapter 12 Solutions
Principles of Economics (12th Edition)
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