Does price impact supply and demand, or is it supply and demand
that determines price?
In: Economics
Q73. the price is 3, the quantity demanded is 8. When the price is 6, the quantity demanded is 4. What is the price elasticity of When demand? -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Q74. A perfectly inelastic demand curve will be ---------------- on a graph while a perfectly elastic demand curve will be ------------------on a graph. a. vertical; horizontal b. horizontal; vertical c. vertical; vertical d. horizontal; horizontal
Q75. When demand is price-inelastic, a price decrease will result in:
a. an increase in total cost. b. an increase in total revenue. c. a decrease in total cost. d. a decrease in total revenue.
Q76. The practice of charging different prices to different buyers is called:
a. total revenue. b. price discrimination. c. price elasticity. d. an increase in demand.
Q77. A percentage change in quantity supplied divided by a percentage change in price is called:
a. income elasticity. b. price elasticity of demand. c. price elasticity of supply. d. elasticity of substitution.
Q78. When governments restrict agricultural production, the supply curve to shifts to the ----------, the equilibrium price ---------------, and the result is --------------------------------- revenue for farmers.
a. right; decreases; higher b. left; decreases; higher c. left; increases; lower d. left; increases; higher
In: Economics
1. If a price is above the equilibrium price, explain the forces that bring the market back to the equilibrium price and quantity. If a price is below the equilibrium price, explain the forces that bring the market back to the equilibrium price and quantity.
In: Economics
The variables in the file are
Price -Average selling price of houses
Location -A code to indicate the location of the house
Condition -A code to indicate the physical condition of the house
Bedrooms Number of bedrooms in the house
Bathrooms Number of bathrooms in the house
Other Rooms Number of other rooms in the house
(a) Run a regression of Price on Location, Condition, Bedrooms, Bathrooms and Other Rooms. Please attach your Excel file.
(b) What variables seem to be important for buyers of houses? Please explain.
(c) Based on your regression results, if you wanted a low selling price on a house you wanted to purchase, what would you look for? Please explain.
(d) Run a regression of Price on Bedroom, Bathrooms and Other Rooms. Please attach your Excel file
(e) Compare your regression results in (i) to the regression results in (ii). Which would you consider to be a better model and why?
Price Location Condition
Bedrooms Bathrooms Other Rooms
67000 2 2 2
1 2
68000 2 2 3
1 3
68000 2 2 3
1 3
69000 2 3 2
1 3
72000 2 2 4
2 5
75000 3 4 2
1 3
76000 2 3 2
1 2
76900 2 3 3
1 3
77000 2 3 2
3 5
78000 3 2 2
1 2
79000 2 3 3
2 3
80000 2 3 3
1.5 2
80000 2 3 3
1 2
81000 3 3 2
1 3
82000 2 3 3
1.5 3
83000 2 3 3
1 3
84000 2 2 3
1 3
84000 2 3 3
1.5 3
86250 1 4 4
2 3
87000 3 3 3
2 2
89500 3 2 3
2 2
90400 2 4 4
2 4
90500 3 3 3
1.5 3
91000 3 3 3
2 3
91500 3 1 4
2 3
91500 3 1 4
2 3
92500 3 3 3
1.5 4
93500 2 3 3
2 3
93500 2 3 4
2 2
94000 1 2 3
1.5 3
95500 3 3 3
2 2
96000 2 4 3
2 3
96000 2 3 3
2 3
97900 3 4 3
2 3
98000 3 4 3
2 3
98000 2 4 3
2 4
98000 3 4 3
2 3
99000 2 3 4
2 4
99000 3 2 4
2 4
99000 3 3 3
2 3
102000 3 3 4
2 3
102000 2 3 3
1.5 3
102000 3 3 4
2 3
102000 3 4 3
1.5 3
103000 3 3 3
2 3
103000 3 2 3
1.5 2
103500 3 2 3
2 5
103500 3 3 3
2 5
105000 3 3 3
2 5
105000 3 4 3
1.5 3
108000 2 4 3
2 3
112000 3 2 4
2 4
112500 3 4 3
2 4
114900 2 2 5
2 3
115500 3 4 4
2 3
120500 4 5 3
2 4
122000 2 2 3
3 4
125500 3 3 4
2.5 3
127000 2 4 3
2.5 4
128000 4 4 3
2 4
129900 3 4 4
2.5 3
130350 3 3 3
2 4
132350 3 4 3
2 4
133000 3 3 3
2 4
134500 4 3 3
2 3
135500 3 3 3
3 3
135500 4 3 3
3 3
136500 4 4 3
2 4
136500 4 3 3
2 4
137400 3 3 4
2.5 4
137400 4 3 4
2.5 4
137500 4 4 3
2 4
139500 3 4 4
2.5 4
144000 4 3 4
2.5 5
145000 4 3 3
2 3
149000 4 4 3
2 2
155000 4 4 4
2 5
154000 4 2 3
2 4
155500 3 5 3
2.5 3
156500 4 5 3
2 3
163000 4 3 4
2 4
165000 5 4 4
2 2
167000 5 4 4
2 2
168700 3 5 3
2.5 5
169900 4 5 4
2.5 4
169900 4 5 3
2.5 5
169900 4 5 3
2.5 5
176000 4 5 4
2.5 4
179000 4 5 4
2.5 5
179000 4 5 4
2.5 5
179500 4 4 3
2.5 3
179500 5 4 3
2.5 3
187500 4 3 4
2.5 4
203000 4 5 4
3 6
220000 5 5 4
3.5 5
222000 5 4 3
3.5 6
250000 5 4 4
2.5 4
250000 5 5 4
2.5 4
255000 5 5 4
2.5 4
255000 5 5 3
2.5 4
In: Statistics and Probability
1.) price elasticity of demand measures the sensitivity of a change in price of a product to its demand.
a.) true
b.) false
2.) The invisible hand guides government's economic activity just as it does with private economic activity.
a.) true
b.) false
3.) when there is an external benefit (positive externality) in a free market, there is too little of the good produced and consumed.
a.) true
b.) false
4.) which of the following best describes market failure?
a.) Negative externalities
b.) positive externalities
c.) public goods
d.) All of these
In: Economics
11.The price elasticity of supply is
| the percentage change in the price divided by the percentage change in quantity supplied. |
| constant across the short run and long run. |
| always negative. |
| the slope of the supply curve. |
| the percentage change in the quantity supplied divided by the percentage change in price. |
In: Economics
Refer to the following characteristics:
Stock price - $54
Exercise price = $58
Risk-free rate =6% per year, compounded continuously
Maturity = 3 months
Standard deviation = 62% per year
What are the prices of a call option and a put option? (Do not round intermediate calculations. Round the answers to 2 decimal places. Omit $ sign in your response.)
Price of call option __________.
Price of put option __________.
In: Finance
The volatility of a share price affects the options price, the higher the volatility, the higher is the options price. There are many ways of computing volatility, but a popular method is to find the coefficient of variation of daily closing stock prices for a year. Calculate the volatility of the following share prices using daily closing price data from 1 Jan 2019 to 31 Dec 2019 in ASX from Yahoo Finance.
BHP (BHP Group Limited)
CSL (CSL Limited)
CBA (Commonwealth Bank Limited)
MYR (Myer Holdings Limited)
(Please do not write equations in the solution. Embed Excel screenshots in your answers so that the marker can identify the procedures you have adopted to find volatility. Express volatility as %).
In: Finance
If the price increases from $ 1.50 to $ 2.50, what would be the price elasticity of the demand of the faculty and students? (use the midpoint method for your calculations) What reason could there be for students to have a different elasticity to faculty?
|
Price |
amount demand (Faculty) |
amount demand (students) |
|
$1.00 |
500 |
5,000 |
|
$1.50 |
450 |
4,000 |
|
$2.00 |
400 |
3,000 |
|
$2.50 |
350 |
2,000 |
In: Economics
9) Suppose that the price level in Canada is CAD17,800, the
price level in Italy is
EUR13,000, and the spot exchange rate is CAD1.30/EUR. Which of the
following
statement is MOST likely to be true?
A. The internal purchasing power of the Canadian Dollar is greater
than its external
purchasing power.
B. Absolute purchasing power parity suggests that the Canadian
Dollar is overvalued
(relative to the Euro).
C. Absolute purchasing power parity holds.
D. Relative purchasing power parity suggests that the Euro is
overvalued (relative to the
Canadian Dollar).
E. The implied exchange rate of CAD/EUR that satisfies absolute PPP
is about 0.6742.
10) If both uncovered interest parity (UIP) and real interest
parity (RIP) were to hold, then
which of the following is LEAST likely to be true:
A. Real interest rates are the same across different
countries.
Page 5 of 13
B. Expected change in future spot exchange rate is equal to nominal
interest rate
differential.
C. Inflation differential is equal to nominal interest rate
differential.
D. Unbiasedness hypothesis does not necessarily hold.
E. Current spot exchange rate is equal to the ratio of two price
levels.
11) Which of the following statements regarding foreign currency
futures and forward
contracts is LEAST likely to be true?
A. Futures contracts are standardised while forward contracts are
customised.
B. Comparing with forward contracts, futures contracts carry no or
low default risk
C. Investors taking a long position in futures contracts have to
make a premium payment
to the counterparty because they receive a privilege in the long
position.
D. Forward contracts require no explicit collateral while futures
contracts require
margins.
E. Futures contracts are traded in exchange while forward contracts
are traded over-thecounter.
In: Finance