Refer to the demand and supply equations. What are the equilibrium price and quantity?
What will be an ideal response?
Bring similar terms on each side of the equation and solve for equilibrium price and quantity — quantities which make the amount supplied equal to demanded.
2P + 4 P = 80 + 10; therefore, equilibrium P = 90/6 = 15. To confirm that it is the equilibrium price, substitute 15 in the above equations for P.
At 15 P, Qd = 80 - 2 (15 ) = 50 and Qs = - 10 + 4 (15 ) = 50; thus the equilibrium quantity equals 50 units.
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In the real economy, income taxes are generally proportional or progressive
What will be an ideal response?
A decrease in U.S. federal government budget deficits that lowers U.S. interest rates relative to the rest of the world should
A) decrease net exports. B) increase foreign portfolio investment. C) lead to a current account surplus. D) lower the trade balance. E) cause the dollar to appreciate.