Industrial Organization Markets And Strategies 1st Edition Paul Belleflamme, Martin Peitz - Solutions

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‘A current account deficit on the balance of payments is undesirable during a recession but is not really a problem during periods of economic growth.’
Sri Lanka is a major exporter of tea and coconuts. The chart below shows the balance of trade for Sri Lanka from 2004-2013.
Study the data below and answer the questions that follow.Trade in goods = —$18.3bn e Trade in services = +$21.8bn e Netincome = + $6.7bn e Net current transfers = — $5.6bn Outline what is meant by 'net income’.Calculate the value of the balance of trade on the balance of payments.
Study the data below and answer the questions that follow.Balance of trade for country K ($billion), 2014
Use the data below to calculate the current account balance.
Use the data below to calculate the balance of trade.
Since China’s admission to the World Trade Organization in November 2001, the USA has complained that the Chinese government has deliberately kept its exchange rate artificially low. The low value of the yuan compared with the dollar has contributed to the economic problems of the US economy.a
The exchange rate of British pounds (£) in terms of Hong Kong dollars ($) is given by the following demand and supply functions:Qq= 150 — 5P Q,=-25+9P Use the above information to:a calculate the equilibrium exchange rate [2]b calculate the equilibrium quantity (in billions of British pounds)
a Explain, with the aid of a numerical example, what is meant by an‘appreciation’ in the value of a currency.
a Suppose the exchange rate between the Australian dollar (AUD) and the Chinese yuan renminbi (CNY) is AUD1 = CNY6.5. Calculate the price for customers in China of buying textbooks priced at AUD65 from Australia. [2]b Suppose that the exchange rate between the Canadian dollar ($) and the British
a If the exchange rate of the US dollar to pounds sterling is $1 = £0.65, calculate the price paid in pounds sterling by a British tourist spending$45 on a theme park ticket in Florida, USA. [2]b If the US dollar falls against the pound sterling to $1 = £0.6, calculate the new amount that British
Suppose the exchange rate between the British pound (GBP) and the US dollar(USD) is GBP1 = USD1.55. Calculate the price for customers in Britain buying American cars priced at USD35,500. [2]
With reference to the diagram below, calculate the exchange rate in terms of US dollars.
Since 2009, China has been the world’s largest producer, consumer and exporter of tyres, accounting for over 25% of the world’s output of car tyres.The China Passenger Car Association reported that over 20 million new cars were sold in China in 2013, with annual sales growth of over 10%
Use the diagram below to calculate the following:a The cost of the subsidy to the government. [2]b The amount of imports before government intervention. [2]¢ The amount of imports after government intervention. [2]d The total amount spent by domestic consumers under free trade. [2]e The total
Use the diagram below to identify the following:a Consumer surplus before the imposition of a quota. [1]b Producer surplus for domestic firms before the imposition of a quota. [1]¢ Consumer surplus after the imposition of a quota. [1]d Producer surplus for domestic firms after the imposition of a
Use the diagram below to calculate the following:a Consumer surplus before the imposition of the tariff. [2]b Producer surplus before the imposition of the tariff. [2]¢ Consumer surplus after the imposition of the tariff. [2]d Producer surplus after the imposition of the tariff. [2]e Revenue to
Use the production possibilities data below and an appropriate diagram to explain which country should specialise in the production of Aris?
Bangladesh is one of the world’s largest producers of rice and tropical fruits. In Brunei Darussalam, crude oil and natural gas account for around 90% of the country’s gross domestic product. This makes Brunei Darussalam one of the leading producers of oil in Southeast Asia.
Examine how supply-side policies can help to achieve any two macroeconomic objectives.
The diagram below shows the market for money in an economy, where D, is the demand for money and S, shows the supply of money at varying rates of interest.
With the aid of an appropriate diagram, explain how the use of monetary policy can help to close a deflationary (recessionary) gap.
Explain how monetary policy can be used to influence the level of economic activity.
a Explain one drawback of the low tax rates in the United Arab Emirates (UAE). [2]b From the data above, explain two disadvantages for firms based in China and the UK compared with those based in Singapore or the UAE.
Evaluate the extent to which fiscal policy is effective in achieving long-term. economic growth.
Explain how fiscal policy can be used to affect the level of aggregate demand?
Explain why expansionary fiscal policy can cause a budget deficit for the government.
With the aid of an appropriate diagram, explain how the effectiveness of expansionary fiscal policies depends on the shape of the aggregate supply curve.
From the data below, calculate the tax paid by an individual who earns$35,000 a year. INCOME TIER TAX RATE (%) $9000 $9001-$20,000 $20,001-$30,000 0 10 20 $30,001 and above 30
Calculate the change in the amount of tax paid if an individual faces a marginal tax rate of 45% when her income changes from $47,000
Calculate the average tax rate of individuals who earn $50,000 per year in a country that charges a flat rate of 20% income
Use the data below to answer the following questions for an individual who earns $40,000 per year.
Suppose a country taxes an individual $5500 on earnings of $55,000 a year and charges another person $1500 on earnings of $15,000 a year. Explain what type of tax system the country uses.
According to The Economist’s Economist Intelligence Unit, Macau's economy grew by 14.3% in 2013 — the highest economic growth rate for any country in the year. The island nation had enjoyed 9.8% growth in 2012 with gambling revenue increasing by approximately 14% to about $38 billion, making it
For much of the past 20 years, Japan has suffered from deflation (see the chart below).a Define the term deflation. [2]b Explain what evidence there is in the chart to suggest that Japan has suffered deflation for most of the past 20 years.¢ Explain the impacts of prolonged deflation for the
Ira n’s inflation rate climbed above 30% in 2013, having reached 31.5% at the end of the Islamic country’s calendar year. The country, with a population of 74 .8 million, had experienced double-digit inflation rates for most of the past decade. At the end of 2010, the government reduced food
Study the data below and answer the questions that follow.
The data below are for a hypothetical country, Jukeland.a Define what is meant by a ‘consumer price index’ (CPI). [2]b ‘The typical household in Jukeland spends more money on housing than on food or clothing.” Explain this statement.
Calculate how much a basket of goods and services which is currently priced at $1200 would be if the CPI increased from 125.0 to 135.0.
Calculate the consumer price index if there is 3.0% inflation during the year if the price index was previously at 130. [2]
Calculate the inflation rate if the consumer price index changes from 123.0 in Year 1 to 129.15 in Year 2. [2]
Calculate the weighted price index from the information below.
The data below show the inflation rates for a country over 3 years.a Define the meaning of ‘inflation rate’. [2]b Explain why inflation was at its highest level in the third year. [3]
In June 2010, Tesco opened Britain's first supermarket without any checkout workers. Instead, one person is hired to supervise the five checkouts, mainly to assist customers who have not used a self-service checkout before. The UK's largest retailer employs around 221,000 workers in the UK but
According to the International Monetary Fund (IMF), Pakistan's annual unemployment rate between 2007 and 2013 was kept steady at 5-6%. This, according to the Central Intelligence Agency (CIA), meant that Pakistan's gross domestic product grew by 3.7% in 2012 and another 5% in 2013. These changes
Use the data below to calculate the unemployment rate. TOTAL POPULATION PERCENTAGE OF POPULATION EMPLOYED POPULATION OF UNEMPLOYED RETIRED POPULATION 100 million 74.8% 15 million 20%
Use the data below for Country X to calculate the total number of people unemployed. LABOUR FORCE 30 million POPULATION OF WORKING AGE 35 million UNEMPLOYMENT RATE 7.9%
Suppose a country in recession has a deflationary gap of $92 billion and its marginal propensity to consume is 0.76. Calculate the amount of government expenditure needed to close the recessionary gap in order to restore equilibrium.
If government spending increases by $85 million and the marginal propensity to consume is known to be 0.75, calculate the amount by which the aggregate demand curve will shift. [2]
If export earnings increase by $200 million and the multiplier is 2.2, calculate the change in real national income. [2]
If an economy’s marginal propensity to consume is known to be 0.85, calculate the size of the Keynesian multiplier. [2]
Calculate the real gross domestic product (GDP) in 2013 and in 2014 and explain your results. YEAR NOMINAL GDP (SBN) | GDP DEFLATOR 2013 2014 260.0 262.4 106.7 108.5
Calculate the value of gross domestic product (GDP) and gross national product (GNP) from the given information: Consumption = $150bn, Investment expenditure = $60bn, Government spending = $55bn, Export earnings = $31bn, Import expenditures = $28bn,
Explain why product differentiation leads to a negatively sloped demand curve?
With reference to the diagram below, identify the following:a The price charged by the profit-maximising monopolist. [1]b The total costs for the profit-maximising monopolist. [1]¢ The amount of abnormal profit earned by the profit-maximising monopolist.
Use the information below to calculate:a the break-even price b the shut-down price.
The table below refers to the costs and revenues of Tandy Toys Ltd when operating at 5000 units of output per month.
a Use the diagram below to calculate the total revenue at $16. [2]b Identify the average revenue when 120 units are sold. [1]¢ Outline what the difference between area A and area B shows.
Crispian's Candies has monthly fixed costs of $4800 and average variable costs of $1.5. Demand for its candies is 4000 units each month. The average unit price is $4. a Calculate the average costs for Crispian's Candies each month. b Calculate the units of output required for Crispian's Candies to
Calculate the following costs from the data below:a fixed costs of production [2]b average fixed costs at 10. units and 15. units of output [3]c average variable costs at 10. units and 15. units of output [3]d average costs at 10 units and 15 units of output [3]e the marginal cost of production
a Calculate the missing average, total and marginal product values from the information shown in the table below.b Using your calculations, plot a diagram on graph paper to show the average, total and marginal product curve. c Identify the units of labour that maximise total product.
Study the data below for two real estate firms selling residential property over a typical weekend. The number of units sold and the number of sales staff involved are also shown.Calculate the average product as measured by sales volume and sales value per worker for both Sharma Realty and Mintjens
Calculate the total value of the positive externality of production from the information in the diagram. Price ($) 15 10 50 MPC MSC MPB = MSB 0 200 300 400 Quantity ('000 units)
Explain how merit goods and public goods are examples of market failure.
With the aid of a market failure diagram, explain why a government might use congestion zone charging to reduce the use of motor vehicles in city centres such as London and?
Refer to the diagram below and answer the questions that follow.a Explain what situation arises if the government imposes a price floor of $30 for the product. [2]b Calculate the change in consumer spending following the imposition of the price floor. [2]¢ Calculate the change in producer revenue
With reference to the above graph, identify the following:a The change in the value of consumer surplus following the imposition of the price ceiling. [2]b The value of producer surplus after imposition of the price ceiling.
Suppose the demand and supply functions for a product are given as:Qq=100- 5P Q.=20+3P a Calculate the equilibrium price and quantity. [3]b Calculate the price required for producers to sell 80 units. [2]¢ Suppose the government grants a $2.67 per unit subsidy on the product.Calculate the new
With reference to the above graph, calculate the following:a Total tax revenue collected by the government from the imposition of this tax.b Incidence of tax paid by the consumer.¢ The change in consumer spending (or producer revenue) following the imposition of the tax.d The deadweight loss
A 10% increase in the price of computer keyboards leads to an increase in output of 20%. Calculate the price elasticity of supply of computer keyboards following this change in price.
million customers having paid $0.99 each to download the game from Apple’s App Store. With the use of an appropriate diagram,
Angry Birds is a highly popular video game created by Finnish company Rovio, with over
Calculate the value of PES if the market price of beans increases from $2 per kilo to $2.20 per kilo and causes the quantity supplied to rise from 10,000 kilos to 10,500?
Assume the income elasticity of demand for sausages is —0.25 and that there has been a 3% increase in consumer incomes. Calculate the percentage change in the demand for sausages, assuming all other things remain equal.
Calculate the value of cross price elasticity of demand if the demand for Pepsi drops by 10% following a fall in the price of Coca-Cola by 8%, and comment on your findin?
Explain whether the value of the cross price elasticity of demand between private and public transport is likely to be a high or low/positive or negative value.
The price of monthly disposable contact lenses increases from $24.50 to$26.95 per pack and it is observed that the quantity demanded for contact lens solution falls from 225 boxes to 200 boxes per month. Calculate the XED and comment on your findings. [2]
Assume the demand for football match tickets at $50 is 50,000 per week.If the football club raises its price to $60 per ticket and demand subsequently falls to 45,000 per week,
A jeweller reduces the price of her platinum earrings from $400 to$350 per unit, resulting in an increase in demand from 25 units to 30 units per month. Calculate the value of the price elasticity of demand for the earrings and comment on the result. [4]
Explain why the price elasticity of demand for many primary commodities(such as crude oil and iron ore) has a relatively low value, whilst the demand for manufactured products has a relatively high PED value. [4]
From the diagram above calculate the value of:a consumer surplus [2]b producer surplus Price ($) 8 0 2 0 1000 2000 D 3000 4000 Quantity (cans)
a Suppose the demand function for a product is given as Q4 = 80 — 2P whilst its supply is given expressed as Q; = 2P. Plot the demand and supply curves and identify the equilibrium price and equilibrium quantity. [4]b Using your diagram from parta, calculate the quantity of excess demand at a
Calculate the equilibrium price and quantity if the demand function is given as Q4= 600 — 3P and the supply function is Q,=—100 + 2P.
Plot a supply curve that has the linear supply function Q. =—100+ 10P.
From the diagram below, solve the linear function of the demand curve.
Plot a demand curve from the given linear demand function Q= 800 — 25P.
Do sellers benefit from the presence of a reputation system on Amazon MarketPlace? Provide a detailed answer.
In which situations are intermediaries bearers of reputation?
How do recommendation networks affect sales?
What is the role of an information gatekeeper in a search market?
How can consumers react to information overload?
Why do intermediaries in two-sided industries tend to achieve high profits on the multihoming side but to dissipate these profits through competition on the singlehoming side?
How do intermediaries set the price structure on two-sided platforms?
Describe the sorting role of the prices set by intermediaries in matching markets.
Taking the viewpoint of an intermediary, compare two polar business models for market intermediation: the dealer model (buying and reselling goods) and the platform model (providing a marketplace where affiliated sellers can sell directly to affiliated buyers).
Why do buyers and sellers sometimes prefer to trade via a dealer rather than in a decentralized way?
Explain how and why firms try to influence consumers’ expectations in a standards war?
Describe the trade-off between backward compatibility and performance.
Explain why incumbent producers of network goods may have an incentive to build an installed base of consumers through penetration pricing.
Explain why consumer and producer interests in standardization may not be aligned.

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Industrial Organization Markets And Strategies 1st Edition Paul Belleflamme, Martin Peitz - Solutions

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