Microeconomics Answers

Find the elasticity of substitution for the following production function:Q=√LK where Q represent quantity of output produced L and K represent labour and capital used.

how the interest rate works to stabilize aggregate demand in the face of autonomous changes in components of demand such as investment or government expenditure ,if the aggregate supply is perfectly inelastic.

Home has 1200 units of labor available. It can produce two goods as Apples and Bananas.

The unit labour requirement in apple production is 3. For Banana production ,it is 2.

1. Graph Home's Production Possibility Frontier

2. What is opportunity cost for apples in terms of bananas?

3. In the absence of trade, what would the price of apples in terms of bananas? Why?

Assume that Q= (1/3)L³ -10L² -21L

represents short run production function in which only labor is variable input. Then

a) Find the number of labor employed where TPL is maximum. 

b) Find the number of labor employed where APL is equal to MPL 

c) Find the number of labor employed when APL is maximum 

d) Find the number of labor employed when MPL is maximum 

e) Find stages of production 

Price effect is a summation of income effect and substitution effect. explain digramatically in case of

a) fall in price of good Y

b) Rise in price of good x

draw demand curve as well

What are the consequences of the imposition of price ceiling.

A company imports a product from China at a cost of $50 per unit. The product is imported with an import tariff of 20% and it is sold for $100 per unit. The total sales revenues for the company were 85.000. If the government increases the import tariff per unit of the product to 30% and the elasticity of demand is 3 find the following:

(i) How many units of this product the company will sell if the price rises the same amount with the import tariff.

(ii) Calculate if the revenues of the company will increase or decrease with the increase of import tariff.

Find the price for good Z and the quantity supply for good X (show all the calculations) if: (i) The elasticity of supply is equal to 1 and the price increases from $40 to $50.

(ii) If the elasticity of demand is 0.5 and the quantity demanded decreases from 95.000 to 85.000.

(iii) Draw the graph and indicate the equilibrium price and quantity .

Price per Tonne ($) Quantity Demanded Quantity Supplied

40 150 80

50 120 X

60 110 110

80 95 115

Z 85 120

110 80 140

(4L²−0.2L³)=0 find average production of labor marginal production 

Find the turning point and dertemine whether they are Maxima or minima.

i.y=x2-6x+9

ii.y=x2+5xz+z2

iii.y=x2+z2+v2