The differences between positive and normative statements

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The differences between positive and normative statements

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Which one of the following may result in a decrease in the demand for frozen vegetables? A. A rise in consumers’ incomes. B. An increase in the price of frozen vegetables. C. A decrease in the price of freezers. D. A decrease in the price of fresh vegetables. E. A decrease in the price of frozen vegetables.
Evaluate and explain these two statements. 1. An increase in fixed cost increases the minimum-cost output. 2. An increase in fixed cost increases marginal cost.
In the market for Fante Kenley, the supply and demand functions respectively are and When there is excess demand, price adjusts according to the equation a) Find the long run equilibrium price, P* (that is, the price at which there is no excess demand or supply). b) Formulate and solve he first order differential equation giving P as a function of time, t. Is this market dynamically stable or unstable? c) If the initial price is P = 50, how close will the price be to its long run equilibrium value, when t = 10?
Differentiate between social equity and social equality and indicate which of the two is required for improvement in social welfare in a country that has a history of inequality.
Suppose you are a producer of necessities. How can the concept of price elasticity of demand be useful to you when you are determining your pricing strategies? [9 marks]
Gasoline is sold through local gas stations under perfectly competitive conditions and is a constant cost industry. All gas station owners face the same long-run average cost function: AAAA = 0.01qq − 1 + 100 qq and the same long-run marginal cost function: MMMM = 0.02qq − 1 where q is the number of gallons sold per day. a) Assuming the market is in long-run equilibrium, how much gasoline will each gas station owner sell per day? What are the long-run average cost and marginal cost at this output level? b) The market demand for gasoline is: QQDD = 2,500,000 − 500,000PP where QD is the number of gallons demanded per day and P is the price per gallon. Given your answer to part a, what is the price of gas in long-run equilibrium? How much gas will be demanded? How many gas stations will there be? c) Suppose that market demand decreases to QQDD = 2,000,000 − 1,000,000PP due to advances in electric cars. In long-run equilibrium, what is the price of gas? How much gas will be demanded? How many gas stations will there be?
Suppose that a consumer always consumes 2 spoons of sugar with each cup of coffee. If the price of sugar is P 1 per spoonful and the price of coffee is P 2 per cup and the consumer has M dollars to spend on coffee and sugar, how much will he or she want to purchase?
The part of the change in quantity demanded that is caused by substitution of one good for another is