Assume a barter economy that consists of only three standardized goods, (X, Y, Z). The relative prices of those goods are provided in the relative price matrix below. Good X Y Z X Y N 1 1/2 1/3 2 1 2/3 3 1.5 1 a. What is the minimum number of relative prices we should know to describe the pricing of goods in this economy? b. Suppose that the society reached an agreement on the silver to be used as money. Assume that ten silver coins can buy only one Good Z. Find the prices of Good Y and Good X and list all prices in terms of money. c. What are the similarities and differences between the matrix of relative prices and the list of prices in (e)? d. Discuss the role of money as a common denominator. Which function(s) of the money represents this role?

Assume a barter economy that consists of only three standardized goods, (X, Y, Z). The relative prices of those goods are provided in the relative price matrix below. Good X Y Z X Y N 1 1/2 1/3 2 1 2/3 3 1.5 1 a. What is the minimum number of relative prices we should know to describe the pricing of goods in this economy? b. Suppose that the society reached an agreement on the silver to be used as money. Assume that ten silver coins can buy only one Good Z. Find the prices of Good Y and Good X and list all prices in terms of money. c. What are the similarities and differences between the matrix of relative prices and the list of prices in (e)? d. Discuss the role of money as a common denominator. Which function(s) of the money represents this role?

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter1: Introducing The Economic Way Of Thinking

Section: Chapter Questions

Problem 7SQ

See similar textbooks

Similar questions

For all questions, refer to the graph on the reverse side. Use this graph for 1 – 4. The graph represents the market for coffee. Estimation may be necessary, so show work. Name a good that will see increased sales due to the tariff or quota above. Name a good besides coffee that will see decreased sales due to the tariff or quota above. Suppose that 1 US$ = 1.5 South African Rand. Also, suppose that the representative good, peanut butter, is $3 per jar in the US and 4 Rand per jar in SA. How will this situation affect the exchange market for U.S. dollars? Explain/show the effect(s) of these prices. Include the initial effect(s), the market adjustment(s), and the final result(s) on equilibrium.
a) Geppetto and Lewis agree to trade at a rate of 3 puzzles for each puppet. With those terms of trade, who is most likely to be the supplier of puzzles? Who is most likely to be the supplier of puppets? b) The two toy store owners agree to specialize and to trade 30 puzzles for 10 puppets. The terms of trade are still 3 puzzles for each puppet. How many puzzles and puppets will each one have after they complete their trade? Geppetto ? puzzles and ? puppets Lewis ? puzzles and ? puppets Please explain to me how to solve these questions. Don't just give me the answers. Thank you!
Consider the barter exchange model owith 5 agents (A, B, C, D, and E) and 5 goods (a, b, c, d, and e), where agent A initially owns good a, agent B initially owns good b, agent C initially owns good c, agent D initially owns good d, and agent E initially owns good e. The preferences of the agents are given below. Find the allocation that is obtained by using the top trading cycles (TTC) procedure. Show your work in how you obtained your answer. Agent A: b> c> d > e>a Agent B: d > c> e> a > b Agent C: e > a > b> d>c Agent D: 6 > a > c> e>d Agent E: d > b > c> a > e
Recognize the situation when both the parties in a barter economy have to agree to sell and buy each other's commodities ? What is it called ?
Individual and market supply Suppose that Charles and Dina are the only suppliers of ice cream cones in a particular market. The following table shows their monthly supply schedules: Price Charles's Quantity Supplied Dina's Quantity Supplied (Dollars per cone) (Cones) (Cones) 1 0 5 2 3 9 3 5 12 4 6 14 5 7 15 On the following graph, plot Charles's supply of ice cream cones using the green points (triangle symbol). Next, plot Dina's supply of ice cream cones using the purple points (diamond symbol). Finally, plot the market supply of ice cream cones using the orange points (square symbol). Note: Line segments will automatically connect the points. Remember to plot from left to right. Charles’s SupplyDina’s SupplyMarket Supply048121620246543210PRICE (Dollars per cone)QUANTITY (Cones)
8. Andrew and Vladimir are neighbours who enjoy consuming caviar. The demand curve for caviar for Andrew and Vlad are given as follows: Andrew: Vladimir: p = 40-q. p = 80 - 4q. If Andrew and Vladimir are the only two consumers of caviar the market demand curve is kink at the price equals to: a. p = 40 b. p = 20 c. p = 10 d. p = 25
Suppose that Raphael and Susan are the only suppliers of pieces of cake in some hypothetical market. Their annual supply schedules are given by the following table: Price (Dollars per piece) 1 2 3 4 5 PRICE (Dollars per piece) On the following graph, plot Raphael's supply of pieces of cake using the green points (triangle symbol). Next, plot Susan's supply of pieces of cake using the purple points (diamond symbol). Finally, plot the market supply of pieces of cake using the orange points (square symbol). Note: Line segments will automatically connect the points. Remember to plot from left to right. 6 5 1 0 0 20 Raphael's Quantity Supplied (Pieces) 0 20 30 35 40 40 60 80 QUANTITY (Pieces) 100 Susan's Quantity Supplied (Pieces) 20 35 45 50 55 120 Raphael's Supply Susan's Supply Market Supply (?)
Here are the questions and answers : Please draw the graphs for each answers and include all axis and details: PLEASE DO NOT SOLVE THE QUESTIONS THEY HAVE ALREADY BEEN SOLVED. Any further information needed is in the image. C) Determine the equilibrium price of good x (setting the price of good y as 1) that prevails at Home and Foreign under autarky – that is, when they do not trade with each other. Explain why any other price could not be the equilibrium price in autarky." 2 graphs one for home and one for foreign should be "Home and Foreign’s PPF" In autarky, each country has to produce both goods, otherwise, consumers would achieve a utility of 0 if one of the goods they like to consume is not available (plug 0 in one of the goods in the utility function and you get 0 level of utility). From the profit maximization problem in each industry at Home, we know that PxMP LxH = wH = PyMP LyH, At Home, the relative price of x in autarky is given by: PxMP LxH = wH = PyMP LyH…
There are two consumers, i = 1, 2. There are L traded goods in the economy and the consumers are price takers. Each consumer has preferences over the commodities she consumes and over some action h that is taken by consumer 1. That is, Ui (xị, ..., x, , h) Activity h is something that has no direct monetary cost for person 1. For example, it could be playing loud music. From the point of view of consumer 2, h represents an externality of consumer 1's actions if = 0 +0 0
Copy and complete the table below. Q MUx MUy AUx AUy TUx TUy MUx/Px=5 MUy/Py=4 MUy/Py=8 1 60 30 30 30 2 24 55 54 10 3 35 22 145 66 3 1.5 4 6 18 160 3 5 5 3 33 15 75 6 0 12 165 -0.75 -0.375 Given that Q is the units of quantity of commodity X and Y consumed, MUX, AUX, TUX and PX are marginal utility, average utility, total utility and price of commodity X The utilities of commodity Y are similarly defined. Use the information in the above table to answer the questions that follows: Which of the commodities would he pay higher price when 4 units are consumed? Suppose the price of X is 5 and that of Y is 4. How many of the quantity of X and Y should be consumed in order for the consumer to be in equilibrium. If price of Y increase to 8 whiles that of X remains the same, determine the units of X and Y that the consumer need to consume for him to be in equilibrium. Use your results to draw a demand curve for…
Susan and Katy share an apartment, which they have decided to decorate for the holidays. The figure below shows Susan’s and Katy’s individual demand for strands of lights, measured metres. If Susan and Katy were to individually decide how many metres of lights to purchase, how much would be purchased if the price of lights were $16 per metre. SOLUTION IS NOT 20 METRES 5 metres 10 metres 15 metres 20 metres None of these.
What is a willingness to pay? How does this relate to the concept of demand? When determining the cost of manufacturing a product, what considerations are included in the cost? Provide an example of a product and explain each consideration in relation to your example. When purchasing construction materials for a home renovation, what factors should a homeowner consider? Provide an example of a green building product—a sustainable alternative construction material—and explain each factor in relation to your example. Address how the choice of using this particular green building product might influence and be influenced by supply and demand. What assumptions do economists make? Why does each assumption matter in environmental economics? Is the environment an economic asset? Is the environment a social asset? How does global demand for fish affect marine natural resource economics? How is the supply of forest goods influenced by privately and publicly owned forests? Why has supply and…