Answer:
If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to <u>rise and the equilibrium quantity to stay the same</u>.
Explanation:
Perfectly inelastic demand curve indicates the quantity demanded for the life-saving medicine remains the same or does not change in response to a change in price.
Since a part of the law of supply states that the lower the quantity supplied, the higher the price; a reduction in the supply of the life-saving medicine will increase its price.
The combining effect of the two above will lead to an increase in the equilibrium price while the equilibrium quantity will remain the same as it will not respond to the change in price.
The attached graph explains this more clearly. In the graph, the demand curve DD is used to represent the perfectly inelastic demand curve for the life-saving medicine. Therefore, the quantity remains at q no matter the changes, either increase or decrease, in price. Movement from the supply curve S1 to S2 indicates a reduction in supply of the life-saving medicine which causes an increase in the equilibrium price from Po to P1 while the equilibrium quantity stays at q.
This therefore shows that if the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to <u>rise and the equilibrium quantity to stay the same</u>.
Answer: Demand Curve shifts left
Explanation:
Money is now less attractive to hold so people will demand less of it. This will cause the demand curve in the monetary market therefore to shift to the left.
Shifts in the demand curve for money are usually caused when a non-interest determinant of demand changes such as a decrease in income.
Answer:
1. Medicare tax.
2. Local income tax.
3. Federal income tax.
4. Social Security tax.
5. State income tax.
Explanation:
Taxation can be defined as the involuntary or compulsory fees levied on individuals or business entities by the government to generate revenues used for funding public institutions and activities.
The various type of tax with their correct description are;
1. Medicare tax: it is used to support healthcare costs for retired workers. An example is the Affordable Care Act (ACA) which became effective on the 23rd of March, 2010 and it's focused on making affordable health insurance available to qualified people or households through cost-sharing reductions and premium tax credits (subsidies).
2. Local income tax: it is collected by town, school district, counties and cities to fund city or community programs.
3. Federal income tax: it is collected from most workers, who pay up to 39.6 percent of their earnings. This type of tax is paid by employees with respect to the amount of money they receive as their wages or salary.
4. Social Security tax: it is used to provide financial support to retired and disabled workers. In the United States of America, the Social Security Administration (SSA) adopted the Old-Age, Survivors, and Disability Insurance (OASDI) program to support retired and disabled workers.
5. State income tax: it is collected from workers in most states to fund their budget and the rate differs from state to state.
Answer:
Portugal and Austria
Comparative Advantage in the Production of Beer and Cheese:
1a. Portugal
b. Austria
2. a. 3 barrels and
b. 0.09 or 1/11 pounds
3. A. 4 barrels of beer per pound of cheese
Explanation:
a) Data and Calculations:
Portugal's opportunity cost of producing a pound of cheese = 3 barrels of beer
Austria's opportunity cost of producing a pound of cheese = 11 barrels of beer
Price of trade (cheese in terms of beer) = 11/3 = 3.667 = 4
b) Portugal's comparative advantage over the production of cheese is her economy's ability to produce cheese at a lower opportunity cost than Austria. This comparative advantage gives Portugal the ability to sell cheese at a lower price than Austria and realize a more favorable balance of trade.
Answer:
B. Executives
Explanation:
Option E is wrong. Students do not need high-end briefcases for school or other tasks.
Option D is incorrect. Postal workers do not need any expensive briefcases to carry postal service and letters.
Option C is false. Construction workers cannot afford expensive briefcases.
Option A is not correct. Police officers have not necessary to have those briefcases.
Option B is correct. Executives often need high-end briefcases to keep essential things with them. They can also afford expensive bags.
