Microeconomics For Today (MindTap Course List)
9th Edition
ISBN: 9781305507111
Author: Irvin B. Tucker
Publisher: Cengage Learning
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Chapter P1, Problem 5KC
To determine
The association and the causation.
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3. Case 2) Coal plants exit, and Solar generation enters the market
Now, let's consider a scenario where the coal power plant (#1) shuts down and exits the market,
and a solar generation facility is constructed. The capacity of the solar generation facility is the
same as the coal power plant that went out of business. The generation capacities of this market
are shown below, along with their MC.
Table 3: Power Plant Capacity and Marginal Cost: Case 2
Plant #
Energy Source
Capacity (MW)
MC (S/MWh)
2
Oil
100
90
3
Natural Gas
500
50
4
Nuclear
600
0
5
Solar
300
5
Note that the solar plant (#5) can generate electricity only from 7 AM until 5PM. During these
hours, the plant can generate up to its full capacity (300 MW) but cannot generate any when
unavailable.
(a) Draw a supply curve for each hourly market (4AM, 10 AM, 2PM, 6PM).
(b) Find the market clearing prices and calculate how much electricity each power plant
generates in the hourly market (4AM, 10AM, 2PM, and 6PM).
(c) Find the…
Respond to L.R.
To analyze consumer spending, you must review the macroeconomic indicators of Personal Consumption Expenditures (PCE) and Retail Sales over the past year.
Selected Macroeconomic indicators
Personal Consumption Expenditures (PCE) measure the value of household goods and services consumed and are a key indicator of consumer spending.
- Retail Sales: This tracks the total receipts of retail stores and provides insight into consumer demand and spending trends.
- Patterns over the past year:
Personal Consumption Expenditures (PCE) Over the past year, PCE has steadily increased, reflecting consumer confidence and willingness to spend. The growth rate has been moderate, driven by wage growth, low unemployment rates, and government stimulus measures. However, inflationary pressures have also impacted real purchasing power, leading to a mixed outlook.
- Retail sales have also experienced fluctuations but have generally trended upwards. After a…
4. Case 3) Electricity demand increases due to increased EV adoption
We will continue using the Case 2 supply curve (with the solar plant in operation) for this
analysis. Suppose that electricity consumption from electric vehicles (EV) increases
significantly. Consequently, electricity demand in the wholesale market increases at every hour.
The new demand levels are shown in Table 5 below.
The market operator has backup power plants (using natural gas) ready, with a total capacity of
300 MW and a MC of $100/MWh.
Table 5: Hourly Demand (selected hours)
Hour
Demand (MWh)
4 AM
800
10 AM
1000
...
2 PM
1100
...
6 PM
1300
(a) Find the market clearing prices and calculate how much electricity each power plant
generates in the hourly market (4AM, 10AM, 2PM, and 6PM). Is there a specific hourly
market in which the market operator will need to dispatch backup generation?
(b) Compare the Case 2 scenario with the Case 3 scenario in terms of CO2 emissions and
average electricity price. Based on…
Chapter P1 Solutions
Microeconomics For Today (MindTap Course List)
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- 2. Case 1) NG price decreases Now, suppose that the price of natural gas decreased substantially, causing the marginal cost of the NG power plant to decrease to MC = $35/MWh. The demand is the same as in Case 0. (a) Draw a new supply curve that reflects the MC change of the NG power plant. (b) Find the market clearing prices and calculate how much electricity each power plant generates in the hourly market (4AM, 10AM, 2PM, and 6PM). (c) What happened to the coal power plant? (d) Do you think the market outcomes (like average price) and the total CO2 emissions have improved under this Case 1 scenario (use the emissions data provided in the lecture slides)?arrow_forward1. Case 0) Baseline case Table 1: Power Plant Capacity and Marginal Cost: Case 0 Plant # Energy Source Capacity (MW) MC (S/MWh) 1 Coal 300 45 2 Oil 100 90 3 4 Natural Gas Nuclear 500 50 600 0 (a) Calculate the capacity mix of this market by energy source. (b) Draw a supply curve of this wholesale generation market. Table 2 below shows the demand levels for selected hours of a representative day. We will consider only these four hourly markets for our analysis. Note that the 6 PM demand is the highest demand level of the day. Table 2: Hourly Demand (selected hours) Hour Demand (MWh) 4 AM 500 10 AM 700 2 PM 800 6 PM 1000 (c) Find the market clearing prices and calculate how much electricity each power plant generates in the hourly market (4AM, 10AM, 2PM, and 6PM). (d) Find the average price of electricity (by taking a simple average of hourly prices; [P(4am) + P(10AM) + P(2PM) + P(6PM)]/4).arrow_forwardDon't used Ai solutionarrow_forward
- How human recource allocated in an economic?arrow_forwardRespond to B.A. I have chosen Gross Domestic Product (GDP) as the macroeconomic indicator to review and provide a forecast prediction. Based on the current trend I predict a 2% annual GDP growth rate, indicating an unstable economy due to the impact of Donald Trump's tariffs on some countries and other other economic factors. This growth rate is lower than the historical average , indicating a slowdown in economic expansion. Overall, the forecast suggests a modest growth in GDP, but with potential risks and uncertainties ahead. But if he reverse his tariff policies, I think it could possibly result in a strong economic growth. As the removal of tariffs would likely minimize the costs for businesses and consumers and also rise trade and economic activities. Provide feedback/comments this post. You could agreement or disagreement (including why you agree or disagree). Or you could expand on this post by sharing different views and predictions.arrow_forwardCan you show me how to solve this.arrow_forward
- ECON 2106: Microeconomics I Fall - 2023 Algoma University Homework # 2 (Due: October 19, 2023) 1. The market demand for cashmere socks is given by Q = 1,000 + 0.5I – 400P + 200P’ Where, Q = Annual demand in number of pairs I = Average income I dollars per year P = Price of one pair of cashmere shocks P’ = Price of one pair of wool shocks Given that I = ECON 2106: Microeconomics I Fall - 2023 Algoma University Homework # 2 (Due: October 19, 2023) 1. The market demand for cashmere socks is given by Q = 1,000 + 0.5I – 400P + 200P’ Where, Q = Annual demand in number of pairs I = Average income I dollars per year P = Price of one pair of cashmere shocks P’ = Price of one pair of wool shocks Given that I = $20,000, P = $10, and P’ = $5, determine ƐQP, ƐQI, and ƐQP’.arrow_forwardWhat bill are they currently sponsoring? Please provide the answer to the question using www.akleg.gov for Senate Bill 30?arrow_forwardDo they have any specified areas of interest( examples: oil/gas, education, subsistence). Please provide the answer to the question using www.akleg.gov for Senate Bill 30?arrow_forward
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