help (1 Viewer)

[SeCKSiiMiNh]

hey i need help with this question. i know its easy, but i'm just not getting it.


1. The demand and supply functions for a good are given by
Demand function: Pd = 450 -2Qd
Supply function: Ps = 100 + 5Qs
Where, P is the price in dollars and Q the quantity in units.
(a) State and give verbal descriptions of the slopes and intercepts of the demand and supply functions

thankss

 

[FutureSight01]

Well the curves intersect at Ps = Pd
450-2Q = 100+5q
7q = 350
q = 50

At q = 50, P =
450 - 2(50) = 350
100 + 5(50)= 350

Therefore the Qe is 50, and Pe is $350

Also, the slope for D is a relatively steep slope at m = -2 (-2 is a larger value than -1, you know what I mean lol)
The slope for S is even steeper at m = 5

Where did you get that q btw? Tute? *checks tute hw*

 

[SeCKSiiMiNh]

Well the curves intersect at Ps = Pd
450-2Q = 100+5q
7q = 350
q = 50

At q = 50, P =
450 - 2(50) = 350
100 + 5(50)= 350

Therefore the Qe is 50, and Pe is $350

Also, the slope for D is a relatively steep slope at m = -2 (-2 is a larger value than -1, you know what I mean lol)
The slope for S is even steeper at m = 5

Where did you get that q btw? Tute? *checks tute hw*

LOL econ 1001?

yeah the mathematical bit i get, but i just dont know what to write for the "state and give verbal...."

 

[FutureSight01]

Don't you just say they intercept at here and at this level, and for the slope ahh, maybe say that for every movement of q there is a great movement of p or something. But for intercepts there isn't much else... I mean it's these 2 are equal without industry conditions etc you can't say the impact etc.

 

[SeCKSiiMiNh]

still dont get it.

lol are you in doing econ 1001?

 

[FutureSight01]

I do. you got econ1001 at merewether at 11 tomoz? and hmm... lessee...

Verbal descriptions about the:
Slopes. Well they're both relatively steep. the q coefficient could be something like 1/4 which means it's very... hmm well it's called elastic, but we're covering that this week. Basically, if it's steep, a change in price means less change in q than in p right? cause it's rising (the price) faster than the q. Means as price increases, quantity increases by a lesser amount. So for D, if price falls by $1 or something, quantity would only increase by 50c. Means that it's not very sensitive to price changes. Knowing about elasticity makes this a lot easier to understand lol.

Intercepts. Well... not much to say other than where they are really.

And I can see how this could be confusing. If only I could draw a graph for you

 

[SeCKSiiMiNh]

ohhh i get it now.
THANKS!


and lol i'm in streams 1 and 4.
got a tute tommorow at 9

 

[FutureSight01]

Woah crap... and yeah I'm in stream 1/4 too. The lecturer is awesome ay! Also yay for you getting it.

 

[SeCKSiiMiNh]

Woah crap... and yeah I'm in stream 1/4 too. The lecturer is awesome ay! Also yay for you getting it.

LOL! yeah she's cool. the superman thing right?

and the elasticity thing as well.


well... if you see a short asian guy with a side bag, that's me =/

 

[FutureSight01]

Oh yes THAT short asian guy with a sidebag lol. Soz but yeah... you see the problem. Apart from the fact that I went to bed before you posted. Was today's lecture helpful?

 

[SeCKSiiMiNh]

you were in my lecture today!?

and kinda confusing... im confused about the price floor thing.

 

[FutureSight01]

hmmm lol I was. I was playing connect 4. I won 5/5 games hehehe. Need help?

 

[SeCKSiiMiNh]

really? are you white?

 

[FutureSight01]

greek I had... a dark blue tshirt with 3/4 jeans. dark hair. Backpack. Probably with a few other people.

 

[SeCKSiiMiNh]

lol i didnt see.

i was so embarassed about coming late, so i just kept my eyes down and sat at the front.

 

[FutureSight01]

Ah I see. They always start late though Hehe so you need help with price floors etc?

 

[SeCKSiiMiNh]

yeah. question 4 of the tutorial questions.

 

[FutureSight01]

Well to start you should find the equilibrium conditions. so those eqns are equal.

9 - 0.6Ld = 2+ 0.4Ls
7 = Ls So the amount of labour is 7 people or whatever.

Then sub it into the original
9 - 0.6(7) = 4.8
2 + 0.4(7) = 4.8 So the price for 7 people is 4.8ph

So the curve would intersect at those points. Then, they create the floor of $6. That's above 4.8 So look back on the slides and see what happens. Businesses won't want to pay extra so they don't demand as much. On the other hand people go into the workforce for higher wages (yeah right as if supply would change lol) So you have supply outstripping demand. Unemployment rises as a result of the two (ie surplus of S)

 

[SeCKSiiMiNh]

ohhh i get it now
thanks

 

[FutureSight01]

yw.