You Are Given the Following Market Data for Apples

question 188

Essay

You are given the following market data for apples.
Demand is represented by: P = 12 - 0.01Q
Supply is represented by: P = 0.02Q
where P= price per bushel, and Q=quantity.
a.Calculate the equilibrium price and quantity.
b.Suppose the government guaranteed producers a price of $10 per bushel.What would be the effect on quantity supplied? Provide a numerical value.
c.By how much would the $10 price change the quantity of apples demanded? Provide a numerical value.
d.Would there be a shortage or surplus of apples?
e.What is the size of this shortage or surplus? Provide a numerical value.

Describe the impact of technology on national comparative advantages.

Recognize the economic theories explaining international trade, including the Heckscher-Ohlin model.

Understand how labor productivity and wages influence international trade.

Analyze the benefits of specialization and trade for countries with different production possibilities.

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Definitions:

Accruals

Accounting method that records revenues and expenses when they are earned or incurred, regardless of when the cash transaction occurs.

Indirect Method

A method used to prepare the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate the cash from operating activities.

Term Deposit

A bank deposit with a fixed term and interest rate, where the money must remain deposited for a specified duration, incurring penalties for early withdrawal.

Cash Equivalent

Short-term, highly liquid investments that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.