Microeconomics Answers

Obtain data about 2015 fourth quarter gross domestic product at www.bea.gov to complete the table below.

GDP total in billions? Per person in dollars? Percent total?

Consumption? Per person in dollars? Percent total?
Investment? Person in dollars? Percent total.
Government purchase? Person in dollars? Percent total?
Net exports per person in dollars? Percent total.

Suppose there is news that indicates that gasoline supplies might suddenly become disrupted by a truckers’ union strike. What would you expect would happen to the demand for gasoline in the present? How might consumers change their behavior and why? What impact would this news have on the price of gasoline immediately? Would it matter whether the news story was accurate?

a consumer utility function
is u=√EF. Find the marshalian demand function
for E and F, find the compensated demand
function. now let the budget be m=100. prices
are 1,1. what are the demand quantities? what
is the utility level? Let the price of F rise to 2.
what are the demand quantities? what is the
utility level. What is the income compensation
necessary to put the consumer back to his
original utility level after the price change?.
Assume the utility function is u= lnE + lnF. How
does this new utility function change your
results from the beginning?

Suppose an investor could get a 3% rate of return with no risk, but higher returns require more risk at a constant rate. Draw an investor opportunity schedule and show where a person might maximize utility. Does a person accept some risk?

The cost to the community is estimated to be $6 per person. What kind of externality is this? Why?
Graphthe market for water park business, labeling the demand curve, the social-value curve, the market equilibrium level of output, and the efficient level of output.
What is the per-unit amount of the externality?
You know that the water park will have events in the evening. This will increase both foot traffic and street traffic at night. You believe this will improve the safety of the surrounding businesses, with an estimated benefit of $3 per water park attendee. What kind of externality is this? Why?
Create a new graph illustrating the market for water park business for these two externalities. Label the demand curve, the social-value curve, the market equilibrium level of output, and the efficient level of output.
What is the per-unit amount of both externalities?
Discuss both government and private solutions that would result in an efficient outcome.

if demand for show tickets is described by the equation QD = 100 - p, and supply is QS = 20 + p, find the equilibrium price and quantity. How would you answer change if the supply curve shifted to due to increases in actor salaries? What would the supply curve look like if the capacity of the theatre was 50 people?

what is a PPC? And what assumptions are made by drawing it? Why is it generally concave to the origin?
2. What is opportunity set? Explain the opport. Set for a society with a PPC?
3. State and explain the law of diminishing Marginal Utility? How is law of demand related to it?
4. Explain the law of equi-marginal utility and how does it explain consumer's equilibrium?
5. Distinguish between the cordinal utility and ordinal utility?
Which is more realistic?

If you are saving money with an interest lower than the inflation, you are losing money, but how will it look if you are saving an extreme amount of money? Let's say 1 billion with a 1 % interest, and 2 % inflation. Then you get 10 million a year, and if you only spend a million a year, would you say you are still worse off? Is the answer as simple as yes, but it doesn't matter because you have enough?

If the level of technology used in the production of a good improves, and assuming the quality of the good does not change, then: