Economics<\/p>\n
Name<\/p>\n
Affiliation<\/p>\n
Course<\/p>\n
Date Question 1a:<\/p>\n
Question 1b:<\/p>\n
The oppourtunity cost for 100 more cars as indicated in the above graph is 2 houses<\/p>\n
Question 1c:<\/p>\n
The opportunity cost for producing the last 100 cars is from point B to Point A. which is 500 less 400 which later gives 100 last cars. The opportunity cost is therefore 8-0 which gives 8. <\/p>\n
Question 1d:<\/p>\n
This is not possible as the marginal cost for the production of 150 cars does not have less houses, hence the relativity of 10 houses is not possible. <\/p>\n
Question 2a: Positive<\/p>\n
2b: Positive<\/p>\n
2c: Positive<\/p>\n
2d: Positive<\/p>\n
Question 3a:<\/p>\n
This demand curve indicates that while the prices of products and services increased the demand reduced. <\/p>\n
Question 3b<\/p>\n
The demand curve indicates that when the price of products and service increases there is a decrease in the Quantity demanded by the customers. <\/p>\n
Question 5 i:<\/p>\n
P = 25 -0.5Q<\/p>\n
P-25 = -0.5Q<\/p>\n
0.5Q=25-P<\/p>\n
Q = 12.5 -0.5P<\/p>\n
However, P = 2<\/p>\n
Thus, \u2206Q\/\u2206P = -0.5<\/p>\n
Quantity Demanded at P=2<\/p>\n
(2, 11.5)<\/p>\n
Ed= -0.5(2\/11.5) = -0.08696<\/p>\n
Therefore there exist perfect elasticity in Demand<\/p>\n
Question 5ii:<\/p>\n
2Q = 10-2P<\/p>\n
Q = 5-P<\/p>\n
However, P=2<\/p>\n
Thus, \u2206Q\/\u2206P = -1<\/p>\n
Quantity Demanded at P=2<\/p>\n
(2, 3)<\/p>\n
Ed= -1(2\/3) = -0.666667<\/p>\n
There it shows inelastic Demand<\/p>\n
Question 5 iii:<\/p>\n
Qab= 21 \u2013 1\/4 (Pa + 1\/5 Pb) <\/p>\n
Where Pa=10 Pb=20 find Eab<\/p>\n
However, Pa=10 Pb=20 <\/p>\n
Thus, \u2206Q\/\u2206P = -1\/4<\/p>\n
Quantity Demanded at Pa=10 and Pb= 20<\/p>\n
(14, 17.5)<\/p>\n
Eab= -0.25(14\/17.5) = -0.2<\/p>\n
This is inelastic demand<\/p>\n
Reference<\/p>\n
Akerlof, G. A., & Kranton, R. (2010). Identity economics.\u00a0The Economists’ Voice,\u00a07(2).<\/p>\n","protected":false},"excerpt":{"rendered":"
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