Solve the following.
1. The demand curve for hotel rooms is Qd = 1000-5Pp and the supply curve is Qs = 200+3Ps, where Qd is the quantity demanded and Qs is the quantity supplied, Pp is the price paid by buyers and Ps is the price received by sellers. Using the information above, find equilibrium Price and Quantity for Hotel Rooms 2. In Heartland, the minimum wage is currently $4.00 per hour and the fast-food industry is the only industry that pays the minimum wage. 50% of the workers in the industry are between 16 and 21 years old. The president of Heartland, concerned about decreasing the proportion of families with incomes below the poverty line, proposes increasing the minimum wage by 20%. a. Assume the labor market for low skilled workers is perfectly competitive. Explain why an increase in the minimum wage might reduce employment in the fast-food industry. b. Use supply and demand analysis to describe the likely effect of this increase in the minimum wage on the price and quantity sold of meals at fast-food restaurants? c. If an increase in the Minimum Wage will cause the Equilibrium Quantity of Minimum Wage Labor to decrease, would you then suggest that the Minimum Wage should not be increased? Why or Why not?(3) You and a classmate are assigned a project on which you will receive one combined grade. You each want to receive a good grade, but you also want to avoid hard work. In particular, here is the situation: If you both work hard, you get an A, which gives you each 40 units of happiness .If only one of you works hard, you both get a B, which gives you each 30 units of happiness. .If neither of you works hard, you both get a D, which gives each of you 10 units of happiness. . Working hard costs 25 units of happiness. (a) Fill in the following payoff matrix: Your decision Work Shirk Classmate's Work decision Shirk (b) What is the likely outcome? Explain your answer. T (c) If you get this classmate as your partner on a series of projects throughout the year, rather than only once, how might that change the outcome you predicted in part (b)?1. The following market demand and firm cost conditions describe a perfectly competitive industry p = 1000 - 0.001Q TO = 20q - 0.2q2 + 0.001q where TC is total cost. All firms are identical. Determine the long-run equilibrium price (p), market output (Q), firm output (q) and number of (identical) firms. (Hint: marginal cost is MC = 20 - 0.4g + 0.003q?) (10 marks) 2. The City of Calgary has a more or less free market in taxi service. Any respectable firm can provide taxi service as long as the drivers and cabs satisfy certain safety standards. Let us suppose that there is a constant marginal cost and average cost per trip of a taxi ride equal to $5 and that the average taxi has a capacity of 20 trips per day. Let the market demand function for taxi rides be given by Q = D(p) = 1100 - 20p, where demand is measured as rides per day and price is measured in dollars. Assume that the industry is perfectly competitive (a) What is the competitive equilibrium price per ride? What is the equilibrium number of rides per day? What is the minimum number of taxi cabs in equilibrium? (5 marks) (b) During the Calgary Stampede, the influx of tourists raises the demand for taxi rides to D(p) = 1500 - 20p. Find the following magnitudes, based on the assumption that for these 10 days in July, the number of taxicabs is fixed and equal to the minimum number found in part (a): equilibrium number of rides per day and profit per cab per day. (4 marks) (c) Now suppose that the change in demand for taxicabs in part (b) is permanent. Find the new equilibrium price, equilibrium number of rides per day, and profit per cab per day. How many taxi cabs will be operating in equilibrium? How does the new equilibrium compare to the equilibrium found in part (b). Explain why the answer found here in part (c) differs from the answer found in part (b). (4 marks) 3. Suppose that there are four identical firms in the market, each having a marginal cost given by: MC(q) = where q is the output of an individual firm. The market inverse demand is given by: P = 200 - .5Q where Q is the total amount sold in the market. (a) What is the supply curve of the industry when there is competition between the four firms? (3 marks)28. A mandatory arbitration clause in a contract may be rescinded if: if (Circle all that apply) a. One of the parties files bankruptcy b. The parties have unequal bargaining power c. The dispute is between two businesses d. It was entered into as a result of the fraud of one of the parties 29. The Constitution has enumerated the following powers as exclusive to the federal government (Circle all that apply) a. Taxation of income b. Bankruptcy c. Environmental regulation of businesses d. Civil rights protection 30. Which of the following are concurrent powers of the state and federal governments? (Circle all that apply) a. Establishment of post offices b. War powers C. Regulation of commerce d. Consumer protection 31. The Full Faith and Credit clause is intended to ensure that parties will not be required to 32. All states are required to treat the citizens of other states the same as they treat their own citizens under the Constitution's clause. 33. Under federalism, the federal government regulates e-commerce that substantially affects 34. Civil rights protected by the Bill of Rights include the following (Circle all that apply) a. Right to the equal protection of laws b. Right to vote C. Right to engage in political speech d. Right to travel 35. The word "persons" as used in the Bill of Rights includes the following (Circle all that apply) a. Citizens b. Non-citizens c. Corporations d. Partnerships 36. Laws that limit a fundamental right, such as the right to vote, must (Circle all that apply)
