Market Equilibrium

Market Equilibrium - an input have access to cheaper...

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Market Equilibrium Robert McGill BA 201 Microeconomics 12 March 2011
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Market Equilibrium 1. For each event, illustrate the impact on the relevant market and determine what will happen to the equilibrium price and quantity in that market. (40 points – 10 points per line item) Event Market for: Show which curve shifts Equilibrium price rise or fall? Equilibrium quantity increase or decrease? Economic growth is expected to improve in the next two quarters. Aluminum Demand Price rises Quantity Decrease Plastics production capacity has increased. Plastics Supply Price falls Quantity increase The Japanese government has decided to subsidize its domestic automobile producers with stimulus money. Automobiles Supply Price falls Quantity increase Manufacturers who use plastic as
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Unformatted text preview: an input have access to cheaper plastic. Manufactured goods that use plastic as an input Supply Price falls Quantity Increases 2. Use the information below of Labor to Total Product (TP) to answer questions A, B, and C. (60 points) Labor Total product (pairs of shoes) 1 20 2 50 3 75 4 80 5 75 A. Given the information above, what is the marginal product of the third unit of labor? +30 Tons (2 employees) B. Given the information above, at what point do diminishing marginal returns set in? Diminishing Marginal Returns set in with the hiring of the 3 rd employee. C. Given the information above, at what point do negative marginal returns set in? Negative Marginal Returns set in with the hiring of the 5 th employee....
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This note was uploaded on 11/18/2011 for the course BUSINESS BA201 taught by Professor Kjkjkjkj during the Spring '08 term at Grantham.

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Market Equilibrium - an input have access to cheaper...

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