Question 1 - We observe that the equilibrium price of turkey meatball rises but the equilibrium quantity of beef meatball drops. Assume that turkey meatball and beef meatball are substitutes. Also note that turkey and turkey meatball are two different objects. The same caution applies to beef and beef meatball.
Explain whether or not each of the following statement is true, using for each statement the graph of Demand and Supply curve for the market of turkey meatball and the market of beef meatball.
(1) A rise in the price of turkey is responsible for these observations.
(2) A fall in the price of beef is responsible for these observations.
Question 2 - Bert, as a Consumer, places the value on a pair of jeans as follows:
Value of first pair: $30
Value of second pair: $28
Value of third pair: $26
Value of fourth pair: $24
Value of fifth pair: $21
Value of sixth pair: $19
Value of seventh pair: $17
Ernie, as a Producer, pays the following cost to produce jeans.
Cost of first pair: $12
Cost of second pair: $15
Cost of third pair: $17
Cost of fourth pair: $19
Cost of fifth pair: $21
Cost of sixth pair: $24
Cost of seventh pair: $26
Using the information given above, answer the following questions:
(1) Drive the quantity demanded and the quantity supplied at the price of $24.
(2) Derive the equilibrium price and compute the sizes of the consumer and the producer surpluses at the equilibrium price.
Question 3 - A hypothetical study examines the operations of a couple of hundreds medical clinics, with the data for the amount of expenses for new medical equipment relative to the total expenses in a particular year(s), and the amount of revenue per physician in subsequent years.
The study finds that the more a clinic spends for new equipment, the more revenue the clinic generates in subsequent years. Based on the finding, the principal analyst of the study concludes that a purchase of new medical equipment causes an increase in a clinic's revenue. Someone else, who is not involved in the study, argues that the conclusion has a problem of ‘reversed causality.'
Provide a possible reason why study's conclusion could have a problem of ‘reversed causality'
Question 4 (see images Attachment)
(1) What is the economic meaning of Qx (Quantity) in the inverse supply function?
(2) What is the economic meaning of Qx (Quantity) in the supply function?
(3) What is the economic meaning of Px (Price) in the inverse demand function?
(4) What is the economic meaning of Px (Price) in the demand function?
Question 5 - A Korean BBQ restaurant has four workers for washing jobs: Dane, June, Park, and Pola. Each works eight hours a day and can produce two washing services: washing rice bowls and washing grill racks. In an hour, Dane can either wash 100 rice bowls or wash 140 grill racks
In an hour, June can either wash 140 rice bowls or wash 140 grill racks
In an hour, Park can either wash 160 rice bowls or wash 100 grill racks
In an hour, Pola can either wash 100 rice bowls or wash 160 grill racks
Graph the production possibilities frontier over one day for this restaurant. In the graph, you must identify the points where transfer of a worker from one job to another starts to take place, by showing the coordinates of the points. In answering this question, you must take into account the fact that every worker works eight hours a day.
Attachment:- Assignment.rar