Answer:
1-The four characteristics of the price system are that it is neutral, market driven, flexible, and efficient. It is neutral because prices do not favor the producer or the consumer because the they both make choices that determine the equilibrium price.
2-Why is the price system an efficient allocator of economic resources? Prices are neutral, which means they are equally fair to both consumers and producers. They are flexible which means they can adapt to changing economic conditions. Prices are familiar which means that everyone understands how they work.
3-how do prices serve as signals and incentives to producers to leave a particular market? it showed that when a strong competitor offers similar products for lower prices other producers must also lower their prices. Less efficient companies were driven from the market.
4-demonstrates the effects of competitive pricing because it shows how the company strategically lured customers away from rival producers while still making the highest profit.
Explanation:
:)
Answer:
Appreciate more
Explanation:
Suppose an increase in the demand for dollars has caused an appreciation of the dollar. According to the purchasing power parity theorem, the value of the dollar in the future will appreciate more. This is because the shift in demand and supply will cause an increase in the value of the dollar. Purchasing power parity (PPP) is a theory which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries.
Answer:
Change in government expenditure needed = 300
Explanation:
Multiplier 'k' = Change in Income / Change in Govt. expenditure = dY / d GE = 1 / ( 1-MPC )
Desired change in Y, ie GDP = 900 billion , MPC = 2 / 3.
k = 1 / ( 1 - 2/3 ) = 1 / ( 1/3 ) = 3
3 = 900 / d GE
d GE = 900 / 3 = 300
Change in government expenditure = 300
Answer:
DEMAND AND SUPPLY SHIFTS IN FOREIGN EXCHANGE MARKETS
I guess the correct answer is microeconomic analysis.
GeeGee’s is a community-based bakery known for its scrumptious tea cakes. The recipe calls for expensive spices imported from Asia. Recently the cost of these spices has risen dramatically, leading GeeGee’s to consider increasing its prices. In order to analyze how this change would affect consumer choices, GG’s management could perform a microeconomic analysis.
