Posted: November 5th, 2015

Economics

Economics

A-Show these data graphically. Upon What specific assumptions is this production possibilities curve based?

B-If this economy is at point C, what is the cost of the  more automobile? Of one more forklift? Which Characteristic of the production possibilities curve reflects the of increasing opportunity costs: its shape or its length?

C-If the economy characterized by this production possibilities table and curve were producing 3 automobiles and 20 forklifts, what could you conclude about its use of its available resources?

D-Is production at a point outside the production possibilities curve currently possible? Could a future advance in technology allow production beyond the current production possibilities curve? Could international trade allow a country to consume beyond its current production possibilities curve?

7. Suppose that the demand an supply schedule for rental apartments in the city of Gotham are as given in the table below:

Monthly Rent     Apartments Demanded       Apartments Supplied

$2500                           10,000                              15,000

2,000                            12,500                             12,500

1,500                          15 ,000                                  10,0000

1,000                           17,500                                7,500

500                               20,000                                5,000

A-What is the market equilibrium rental price per month and the market equilibrium number of apartments demanded and supplied?

B- If the local government can enforce a rent –control law that sets maximum monthly rent at$1500, will there be a surplus or a shortage? Of how many units? And how many units will actually be rented each month?

C-Suppose a new government is elected that want to keep out the poor. It declares that the minimum rent that can be charged is $2500 per month. If the government can enforce that price floor, will there be a surplus or a shortage? Of how many units? And how many units will actually be rented each month?

D-Suppose the government wishes to decrease the market equilibrium monthly rent by increasing the supply of housing. Assuming that demand remains unchanged, by how many units of housing would the government have to increase the supply of housing in order to get the market equilibrium rental price to fall to $1500 per month? To $1,000 per month? To $500 per month?

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