Question
Label the following statements as True/False. If you label a statement as false give a BRIEF explanation of why it is false. a) When price is below the equilibrium level there is excess supply, and when price exceeds the equilibrium level there is excess demand. b) The derivative of the function: f(x) = (4x^2)ln(2x) is f'(x) = (8x)ln(2x) + 4x. c) Determinants of supply include Technology and the price of Factors of production. Determinants of demand include Income and the number of buyers. d) For preferences to be rational, they must satisfy completeness and transitivity. For preferences to be well-behaved, they must satisfy monotonicity and convexity. e) If the demand for burgers is given by P = 120 - 2Q^D, and the supply for burgers is given by P = 1/2Q degree. Then the equilibrium quantity and price for burgers is: (Q*, P*) = (42, 21). f) If a consumer has convex preferences this implies, all else constant, more of a good is preferred to less.
Explanation / Answer
a)
False
because price and supply have positive relationship and if price is low then supply also low. and demand and supply have nigative relationship so price is high then demand should be low.
b)
False
because
(8x/ln(2x))((4x)/ln^2(2x))
Simplify:
(4x(2ln(2x)1))/(ln^2(2x))
c)
True
because
Supply is depend on cost and technology
Demand is depend on consumer income and price
d)
True
