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Market systems may not allocate resources efficiently for many reasons. Governments intervene in order to correct such market failures. Imposition of price controls is one of such interventions. Using relevant diagrams, discuss the use of (i) maximum prices, and (ii) minimum price controls in the markets and the consequences of each approach to the market and the society.
A monopolistic company has to spend exactly $3000 as total cost for the production of a number of Basic Science and Mathematics textbooks for three schools. The Basic Science textbook sells at P1 = 455 – Q1 – Q2 and the Mathematics textbook at P2 = 910 – Q1 – 4Q2 where P1 and P2 denote the prices; Q1 and Q2 denote the number of Basic science and mathematics textbooks produced respectively. The joint cost of producing these textbooks is given as TC = 5Q1 + 10Q2
(i) Find the maximum profit the producer can make
(ii) Estimate the new profit if the company decides to reduce the total cost
by $50 (Assume that 2nd order conditions are satisfied)
to the value of the U.S. dollar if the State bank of Pakistan decides to contract the money supply
to fight inflation.
market has failed to determine a true value of the environment and
hence caused a market failure.
S=-80+0.25Y, and import function is is given as 100-0.05Y then find
a. At what level of equilibrium level of income and consumption will occur?
b. If government expenditure increase bye 55 crore and government imposes the lump sum taxes worth 15 crore what impact will it have on consumption and income
c. What will happen to imports if government raises the import duty by 10%
d. Calculate the multipliers of government expenditure and foreign trade
Refer to the accompanying figure. The total utility of consuming 4 pizzas a week is:
A) 15 B) 22.5 C) 75 D) 90
5. The price elasticity of demand for a good measures the responsiveness of: A) demand to a 1 percent change in price of that good.
B) price to a 1 percent change in the demand for that good.
C) quantity demanded to a 1 percent change in price of that good.
D) price to a 1 percent change in the quantity demanded of that good.
indirect quote be?
6 A monopolist has demand and cost curves given by: (5 marks) QD = 10,000 - 20P TC = 1,000 + 10Q + .05Q2
environmental degradation. Do you agree with this? If yes, then justify
your answer with facts and figures.
#339914 on Dec 2023