EBK MACROECONOMICS
EBK MACROECONOMICS
7th Edition
ISBN: 8220106812686
Author: O'Brien
Publisher: PEARSON
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Chapter 14, Problem 14.4.11PA

Sub part (a):

To determine

Why does the Chinese businesses starved of credit.

Sub part (b):

To determine

Relation between Chinese central bank policy and lack of credit.

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19. (20 points in total) Suppose that the market demand curve is p = 80 - 8Qd, where p is the price per unit and Qd is the number of units demanded per week, and the market supply curve is p = 5+7Qs, where Q5 is the quantity supplied per week. a. b. C. d. e. Calculate the equilibrium price and quantity for a competitive market in which there is no market failure. Draw a diagram that includes the demand and supply curves, the values of the vertical- axis intercepts, and the competitive equilibrium quantity and price. Label the curves, axes and areas. Calculate both the marginal willingness to pay and the total willingness to pay for the equilibrium quantity. Calculate both the marginal cost of the equilibrium quantity and variable cost of producing the equilibrium quantity. Calculate the total surplus. How is the value of total surplus related to your calculations in parts c and d?
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