Answer:
1. Neither ; 2. Consumer Surplus ; 3. Producer Surplus
Explanation:
Consumer Surplus is the difference between a good's price paid by consumer, & maximum price the consumer is willing to pay for the good.
Producer Surplus is the difference between a good's price received by a seller, & minimum price at which the seller is willing to sell the good.
1. Willing to pay $209 for watch, buyer willing to sell at $196, no trade as price ceiling at $190 : It illustrates neither concept as transaction has not actually occurred, so no price established.
2. Willing to pay $39 for sweater, purchased it for $32 : It illustrates 'Consumer Surplus' case = $7 , as it shows difference between maximum willingness to pay by buyer ($39) & the actual buy price ($32)
3. Willing to sell laptop at $190, sold it at $199 : It illustrates 'Producer Surplus' case = $9 , as it shows difference between minimum willingness to sell price ($190) & actual sale price ($199)
Answer:
a) 8%
b) 5%
c) 4%
Explanation:
Given:
Growth in real GDP = 3%
Growth of money stock = 8%
Nominal interest rate = 9%
Now,
(a) As per Classical Quantity Theory of Money
Money Supply (M) × Velocity (V) = Price level (P) × Real GDP (Y)
also,
Nominal GDP = P × Y
Change in M + Change in V = Change in P + Change in Y
Since,
V = Constant
thus, Change in V = 0
Change in M = Change in P + Change in Y
Change in P + Change in Y = Change in Nominal GDP = Change in M
thus,
Change in Nominal GDP = 8%
(b)
8% = Change in P + Change in Y
8% = Change in P + 3%
Change in P = Inflation Rate = (8 - 3)% = 5%
(c) Real interest rate = Nominal interest rate - Inflation rate
= (9 - 5)%
= 4%
Answer: a. Supply
b. Adjust back
Explanation:
Classical economics explains the importance off aggregate supply, and the ability of an economy to adjust back to achieve it full employment equilibrium without help or assistance but by itself.
By attaining equilibrium it means that Owing to the fair operation of opposing forces, a state of rest or equilibrium. Equal balance of any forces, or factors.
Answer:
Economies of scope
Explanation:
Economies of scope -
The meaning of the term economies of scope is the reduction in the cost of a particular product due to the production of some similar product .
It refers to the situation where the marginal cost of the company or organization reduces , because of some production of the complimentary services or goods , is referred to as economics of scope .
Hence , from the given scenario of the question ,
The correct answer is Economies of scope .
