Market Equilibrium And Trade Analysis In Various Markets

Market Equilibrium and Trade Analysis in Various Markets and Scenarios

Below, you are provided with the demand curve and supply curve for pineapples. You will use this diagram to identify the equilibrium price, and the quantity demanded and quantity supplied of pineapples at various prices below that equilibrium price. You will determine whether it is quantity demanded or quantity supplied that determines the quantity of pineapples bought and sold when the market price is below the equilibrium price.

Part 1: What is the equilibrium price of a pineapple?

Part 2: At a price of $2 per pineapple, what is the quantity of pineapples demanded? The quantity of pineapples supplied?

Part 3: At a price of $2 per pineapple, how many pineapples are bought and sold?

Part 4: At a price of $3 per pineapple, what is the quantity of pineapples demanded? The quantity of pineapples supplied?

Part 5: At a price of $3 per pineapple, how many pineapples are bought and sold?

Below, you are provided with the demand curve and supply curve for apples. You will use this diagram to identify the equilibrium price, and the quantity demanded and quantity supplied of apples at various prices above that equilibrium price. You will determine whether it is quantity demanded or quantity supplied that determines the quantity of apples bought and sold when the market price is above the equilibrium price.

Part 1: What is the equilibrium price of an apple?

Part 2: At a price of $2 per apple, what is the quantity of apples demanded? The quantity of apples supplied?

Part 3: At a price of $2 per apple, how many apples are bought and sold?

Part 4: At a price of $3 per apple, what is the quantity of apples demanded? The quantity of apples supplied?

Part 5: At a price of $3 per apple, how many apples are bought and sold?

Suppose each country has 2,000 workers and at autarky, they are both using 1000 workers each for cars and phones. They now decide to trade, with the terms of trade set at 2,000 cars for every 14,000 phones. Based on this, fill in the following table regarding production and consumption before and after trade for the United States and China.

Finally, in the context of economic principles, analyze a survey showing that 84% of people believe that it is morally wrong not to report all income on tax returns. Determine the probability that a randomly selected individual does not hold this belief.

Additionally, evaluate probabilities related to drive-thru order accuracy at various fast food chains. For example, the probability of selecting an order not from Restaurant A, or from restaurants C or D, or orders that are not accurate, given the data provided. Lastly, consider a probabilistic scenario concerning births in a country where the probability of a baby being a girl is 0.464, and compute the probability that at least one in five births is a boy.

Paper For Above instruction

The analysis of market equilibrium involves understanding the interactions between supply and demand curves for specific commodities such as pineapples and apples. Determining the equilibrium price is fundamental, as it signifies the point where the quantity demanded by consumers equals the quantity supplied by producers, establishing market balance. In the case of pineapples, the equilibrium price can be found where the demand and supply curves intersect, indicating the market-clearing price at which the number of pineapples consumers wish to buy matches the number producers are willing to sell.

Using the provided data, one can determine the equilibrium price through graphical analysis or by calculating the point where the quantity demanded equals the quantity supplied. Once established, at a price below the equilibrium (e.g., $2 per pineapple), the quantity demanded exceeds the quantity supplied, resulting in a shortage. Conversely, at prices above equilibrium (e.g., $3 per pineapple), the quantity supplied exceeds demand, leading to a surplus. These dynamics reveal the mechanisms by which markets adjust prices to reach equilibrium over time.

Specifically, at a market price of $2 per pineapple, the demand curve typically shows a higher quantity than the supply curve, indicating excess demand or shortage. The quantity bought and sold at this price is limited by the lesser of the two, often the supply, which constrains the market from reaching the higher demand. Similarly, at $3 per pineapple, demand diminishes while supply increases, and the actual transactions occur at the intersection where quantity supplied equals quantity demanded, dictating the true market exchange volume.

The case of apples illustrates similar principles but in the context of prices above the equilibrium. When the price rises above the equilibrium, suppliers tend to increase production, while consumers reduce their purchases, leading to surpluses. Identifying the point where supply equals demand during these conditions assists in understanding how markets reach or deviate from equilibrium due to shifts in consumer preferences, production costs, or external shocks.

The international trade scenario involving the United States and China demonstrates how comparative advantages and opportunity costs influence production and consumption. Both nations, initially producing for themselves (autarky), can increase benefits through trade. The terms of trade set at 2,000 cars for 14,000 phones enable each country to specialize according to their comparative advantage, thereby increasing overall consumption possibilities beyond autarkic levels. Post-trade, each country adjusts its production based on the global market price, which leads to increased consumption of both goods. Calculating the specific production and consumption quantities requires analyzing the initial production capacities, the impact of specialization, and the new consumption possibilities resulting from trade.

Furthermore, probabilistic questions such as the likelihood that an individual does not believe that income should be fully reported or that an order from a fast food chain is not accurate involve applying basic probability principles. With the given percentage believing that non-reporting income is morally wrong, the complement rule provides that the probability someone does not hold this belief is 1 minus that percentage (i.e., 16%). Such questions reveal how survey data can be translated into probabilistic models, aiding policymakers and business analysts in understanding public opinion and operational reliability.

Analysis of drive-thru order accuracy involves calculating probabilities based on observed data. For example, the probability of selecting an order that is not from Restaurant A is derived by subtracting the proportion of accurate orders from that restaurant from 1. Similarly, the combined probability of getting an order from specific restaurants or with certain accuracy status involves summing individual probabilities and considering overlaps using the inclusion-exclusion principle.

Lastly, the probability that at least one of five births is a boy, given the probability of a girl being 0.464, employs the complement rule and binomial probability calculations. The probability that all five are girls (i.e., no boys) is calculated using the binomial probability formula, and subtracting this from 1 yields the probability that at least one birth is a boy. These probabilistic assessments are essential tools in fields ranging from economics to public health, providing insights based on statistical inference and probability theory.

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