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In-s [12.5K]
3 years ago
9

Determine how the equilibrium price and equilibrium quantity in the market for coffee changes if the price of tea, a substitute

for coffee, decreases, and due to better weather, the price of coffee beans also decreases. Equilibrium price Equilibrium quantity
Business
1 answer:
kkurt [141]3 years ago
5 0

Answer:

Equilibrium price = Decreases

Equilibrium quantity = Indeterminate

Explanation:

Here, we suppose that tea and coffee are substitute goods and we know that substitute goods have a positive cross price elasticity of demand.

So, if there is a fall in the price of tea then as a result the demand for coffee decreases which shifts the demand curve of coffee leftwards.

And, there is a fall in the price of coffee beans due to the better weather condition and coffee beans are used as an ingredient for producing coffee.

Hence, there is a fall in the cost of production of coffee which increases the supply of coffee and shifts the supply curve of coffee rightwards.

Therefore, there is a fall in the equilibrium price level of coffee and the effect of these shifts on the equilibrium quantity is indeterminate because that will be dependent upon the magnitude of the shifts of both the curves.

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The towns of Jekyll and Hyde each have a labor force of 2,000 people. In Jekyll, 500 people were unemployed for the entire year,
zloy xaker [14]

Answer:

D) 12;3

Explanation:

The average duration of unemployment in Jekyll is 12 month and 3 months in Hyde. The total employees in Jekyll are 2000 out of which 500 are not employed during the entire year. The calculation will be as,  

For Jekyll town,

(500 unemployed labors * 12 months) / 500 unemployed employees

= 12 months.

For Hyde town,

(2000 employees * 3 month unemployed) / 2000 employees  

= 3 months.

7 0
3 years ago
More than 10,000 people waited in line for more than two hours to see a titan arum (a rare flower) at cambridge botanic garden.
weqwewe [10]

An economist would conclude that when goods are not rationed by monetary price or lottery, other rationing mechanisms like waiting arises.

Here, many people were willing to wait for more than two hours to see the rare flower. The visiting was arranged in such a way that first come, first see. The rareness of the flower made no option but to wait in line to see it.

In an economist's perspective, he will compare the flower to the goods. There is rationing for food through monetary and lottery mechanisms. But if  there were no mechanisms like this, then waiting will be the only way to consume goods. Here, because the flower was rare, it cannot be rationed by price. But we are still able to ration goods by price. If someday, there will be lack of goods, then the only rationing mechanism we could opt will be waiting in lines.

Learn more about rationing mechanisms at brainly.com/question/14938189

#SPJ4

7 0
2 years ago
A deferred annuity is one in which interest charges are deferred for a stated time period. True or Flase
Colt1911 [192]

Answer:

False

Explanation:

A deferred annuity is a contract that guarantees a regular income or lump sum payments at a future date. It is a popular and effective way to supplement one's income in retirement days. Insurance companies mostly offer deferred annuities. The insured pays their premiums now and opts to delay in collecting their benefits until some later years. Deferred annuities are also a way of making long term savings.

7 0
3 years ago
The stock of Big Joe's has a beta of 1.38 and an expected return of 16.26 percent. The risk-free rate of return is 3.42 percent.
Oksana_A [137]

Answer:

d. 12.72%

Explanation:

To calculate the expected return on the market, we will use the Capital asset pricing model (CAPM) equation.

The CAPM allows to relate the risk-free rate of return (RFROR), the market risk premium, the beta of an asset and the expected return of this asset.

Expected return = risk-free ROR + (Beta*Market risk premium)

In this case we know all the parameters but the Market risk premium (MRP), so we have:

ER=RFROR+\beta*MRP\\\\\\16.26=3.42+1.38*MRP\\\\MRP=(16.26-3.42)/1.38=9.30

We also know that the beta of the market, by definition, is equal to one. So now that we know the market risl premium we can calculate the expected return on the market:

ER=RFROR+\beta*MRP\\\\ER=3.42+1*9.30=3.42+9.30=12.72

The expected return on the market is 12.72%.

6 0
4 years ago
Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2018. Blue had the
umka21 [38]

Answer:

There will be no amortized value for for research and experimental expenditures will be considered for the year 2018 and 2019 as new product will be introduced for sale from July 2020.

Explanation:

total available amount of deduction for research and experimental expenditures is:

2018 - $500,000 + 90,000 + 8,000 + 6,000 + 15,000  

   = $619,000

2019- $600,000 + 70,000  + 11,000  + 8,000  + 14,000

          = $703,000

2020 - $0

Amortized value for research and experimental expenditures

= ($619,000+703,000)/60

= $22,033 per month

Amortized value for research and experimental expenditures for 2018

= $0

Amortized value for research and experimental expenditures for 2019

= $0

Amortized value for research and experimental expenditures for 2020 (from july to dec => 6 months)

= $22.033*6

= $132,198

Therefore, There will be no amortized value for for research and experimental expenditures will be considered for the year 2018 and 2019 as new product will be introduced for sale from July 2020.

7 0
3 years ago
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