1. Based on the following information for the state of Montana, a....

  1. Home
  2. Homework Library
  3. Business
  4. Economics
  5. 1. Based on the following information for the state of Montana, a....

QuestionQuestion

Transcribed TextTranscribed Text

1. Based on the following information for the state of Montana, a. Draw the Production Possibilities Curve. b. Determine the opportunity costs for a move from A to B; B to C; C to D; and D to E. CHOICE OIL / barrels WHEAT / bushels A 100000 0 B 90000 50000 C 75000 90000 D 50000 120000 E 0 140000 a.) b.) A to B: ______________ B to C: _________________ C to D: _________________ D to E: _________________ 2. State whether the following issues are macroeconomic or microeconomic in nature. a. A firm is trying to decide whether they should expand to another state. ____________________ b. The central bank of the United States increased interest rates by 0.5%. ____________________ c. The GDP of Germany has risen to an alltime high. ____________________ d. The U.S. unemployment rate falls to 6.6% in June 2014. ____________________ e. Google is considering buying another firm to help them expand their robotics division. ____________________ 3. Based on the information provided for the market for video games, answer the following questions. PRICE Q DEMANDED Q SUPPLIED $50 5 17 $45 7 15 $40 9 13 $35 11 11 $30 13 9 a.) Draw and properly label the demand and supply graphs (this means you must label the axes and any lines you include on the graph). b.) What is the equilibrium price and quantity? a.) b.) PRICE: ______________________ QUANTITY: ______________________ Now, assume that a new government report claims that video game play stimulates the brain. c.) What will this do to the demand curve? d.) What will happen to the equilibrium price and quantity? c.) d.) P: _______________________ Q: _______________________ 4. Assume you are a policymaker in Washington DC. Lobbyists for the dairy farmers of America have put pressure on their representatives to put a price control on milk. You have been assigned a position on a new committee to study the impact of such a control. Your job is to: a.) Determine which type of price control would benefit the farmers, a price ceiling or a price floor. b.) Illustrate using a supply and demand graph what such an artificial price looks like. c.) Explain what the results of such a move are for the milk market. In other words, will there be a SHORTAGE, a SURPLUS, or neither created? d.) Finally, what are the impacts of this price control for those who wish to purchase milk? (In other words, what is the unintended consequence of this action? What actions might people take to deal with this price control?) 5. Data for the market for graham crackers is shown below. Calculate the elasticity of demand between the following prices. Price of crackers Quantity Demanded (per month) $3 80 $2.5 120 $2 160 $1.5 200 $1 240 $1.00 - $1.50: ___________________________________ $1.50 - $2.00: ___________________________________ $2.00 - $2.50: ___________________________________ $2.50 - $3.00: ___________________________________ If the price of graham crackers is $1.75 a box should firms raise or lower their prices if they want to increase revenue? Explain this in terms of elasticity.

Solution PreviewSolution Preview

These solutions may offer step-by-step problem-solving explanations or good writing examples that include modern styles of formatting and construction of bibliographies out of text citations and references. Students may use these solutions for personal skill-building and practice. Unethical use is strictly forbidden.

2. State whether the following issues are macroeconomic or microeconomic in nature.

a. A firm is trying to decide whether they should expand to another state.   

Microeconomics.

b. The central bank of the United States increased interest rates by 0.5%.

Macroeconomics.

c. The GDP of Germany has risen to an alltime high.

Macroeconomics.

d. The U.S. unemployment rate falls to 6.6% in June 2014.

Macroeconomics.

e. Google is considering buying another firm to help them expand their robotics division.

Microeconomics.

(In total, Macro is about a country’s economy in whole, while Micro is about one firm’s economical situation.)...

By purchasing this solution you'll be able to access the following files:
Solution.docx.

$18.00
for this solution

PayPal, G Pay, ApplePay, Amazon Pay, and all major credit cards accepted.

Find A Tutor

View available Economics Tutors

Get College Homework Help.

Are you sure you don't want to upload any files?

Fast tutor response requires as much info as possible.

Decision:
Upload a file
Continue without uploading

SUBMIT YOUR HOMEWORK
We couldn't find that subject.
Please select the best match from the list below.

We'll send you an email right away. If it's not in your inbox, check your spam folder.

  • 1
  • 2
  • 3
Live Chats