Microeconomics Answers

Truck drivers who cart goods across these two countries go on a short strike.Analyze how the strike may affect the free trade consumer and producer surplus enjoyed by both products.

Using an economic model that includes both a typical firm/farm in a perfectly competitive market and market supply and demand curves, explain what will happen to the equilibrium price for pork and economic profits of firms/farms in the short run and in the long run.

Find Alpha Vineyard's best-response function.

what sructure is used to benchmark allocative efficiency and why do we use it? Illustrate and explain using diagram.

Consider a couple’s decision about how many children to have. Assume also that over a life time a couple has 325000 hours of time to either work or raise children. The wage is 10 Rand per hour. Raising a child takes 25 000 Hours of time.
i. Draw the budget constraint showing the trade-off between lifetime consumption
and number of children. (Ignore the fact that children come only in whole
numbers) Show indifference curves and an optimal choice for the couple.
ii. Suppose the wages decrease from 10 Rand to 8 Rand per hour. Show how the budget constraint shifts. Using income and substitution effects, discuss the
impact of the change on number of children and lifetime consumption.
iii. Consider now that the wage is a normal good, answer with a graph

Explain why the Average total cost curve and the Average variable cost curve moves closer together as output expand?

Consider a couple’s decision about how many children to have. Assume also that over a life time a couple has 325000 hours of time to either work or raise children. The wage is 10 Rand per hour. Raising a child takes 25 000 Hours of time. i. Draw the budget constraint showing the trade-off between lifetime consumption and number of children. (Ignore the fact that children come only in whole numbers) Show indifference curves and an optimal choice for the couple. ii. Suppose the wages decrease from 10 Rand to 8 Rand per hour. Show how the budget constraint shifts. Using income and substitution effects, discuss the impact of the change on number of children and lifetime consumption. iii. Consider now that the wage is a normal good, answer with a grap

Suppose a 4% increase in the economy leads to an 8% increase in soft drink consumption. Then the income elasticity of demand is:

a. negative, so soft drink are an inferior good
b. negative, so soft drinks are a normal good
c. positive, so soft drink are a normal good
d. positive, so soft drinks are an inferior good

If the demand for potatoes is inelastic, a 4% increase in the price of potatoes will:

a. decrease the quantity of potatoes by more than 4%
b. decrease the quantity of potatoes by less than 4%
c. increase the quantity of potatoes by less that 4%
d. increase the quantity of potatoes by more than 4%