Microeconomics Help!?

[jarl]

Any help will be appreciated!


Recalling some basic reasons about why people engage in trade, provide a short example of a market in which consumers and producers exchange goods. In your example, briefly explain who the consumers and producers are, what factors may influence supply and demand, and how one or both parties are made better off as a result of the trade. ( NOTE: longer, more detailed answers will receive the most credit).


15 points
Question 2

Take a minute to think about the demand for college education and whether or not the costs of attending college (not just tuition, but also some of the opportunity costs associated with attendance) influences the number of students who attend college. Now tell me whether or not you think college education is elastic or inelastic with regard to the price, and back up your answer with an explanation as to why you believe what you do.

There are no "right" or "wrong" answers to this, but I am interested in your thought process, and this will be graded solely on content. Generally speaking, the longer answers will receive more credit than the shorter answers.















20 points
Question 3

Suppose the equilibrium price of wholesale gasoline in Hawaii is $3.00 per gallon but the state has instituted a cap to prevent the price from exceeding $2.75 per gallon. The likely result will be a:
Answer 5 points

Question 4

Think of the market for cellphones. In a short answer, list at least two (2) events that would cause the demand curve to shift, and at least one (1) event that would cause the curve to shift. In your answer, name the event, the curve it will cause to move, and which direction (in or out) the curve will move.



Question 5

Provide a short example of how the law of diminishing marginal utility applies to a real-life situation. In your answer, explain why utility from consumption of this specific good or service increases quickly initially, peaks, and may eventually lead to decreasing utility.

[lintun]

did you just copy and paste a take home test online? what a loser

[avikar76]

Here is the economics of Y!Answers. I get 2 points for answering a question. You have asked 5 complicated questions in one. My opportunity costs are I could answer 5 easier questions in the system and get 10 points with 5 chances at additional 10 points BA instead of 1 chance. Thus a significant opportunity cost means not many people will answer here.

But here is a start anyway. So a gas station can buy gas at $3.00 and sell it at $2,75 losing money on every sale. Guess what? No one bothers to run a gas station. You can assume some might be able to secure a price at less than the equilibrium wholesale price, but your model would still run with severe shortages. You need to draw a supply and demand curve and add in the price ceiling for this.

College. Assume college costs $15,000 a year $15,000 living expenses and you can earn $30,000 a year working. So with the opportunity costs, you are looking at $60,000 a year. You have a certain demand for college based on people with this $60,000 costs. So then tuition goes up 10 percent. You initial reaction is that's outrageous. But do you stop going to college? Probably not because as tuition is only 25% of your total costs, a 10 % increase in tuition is only 2,5% cost increase overall. Also consider if you have been going for 2 or 3 years and the price goes up 10%. You have spent $120,000 to $180,000 already. Are you going to drop out and have nothing to show for your investment based on $1,500 a year increase? So I would say demand for college is relatively price inelastic. You can change the price and it doesn't affect the number of students to the same degree.