Microeconomics Answers

Under what conditions will a firm exit a market? Explain

Explain the concept of the long run economic growth and the key idea of Solow Growth model. Also explain how the Solow growth model is appropriate to long-run growth analysis.

⦁ Explain the Law of diminishing return and why is it applicable especially in agriculture sector?

⦁ What is the relationship between the marginal revenue curve and the demand curve for a single-price monopolist?

Given u(x,y)=10x0.6y0.4 marginal utility of two commodities when x=2 and y=3

Given that the demand for good X is more elastic in country A than country B while the

supply conditions are the same, answer the following questions.

a) Compare the before trade price of X in country A and B.

b) Which country will be importer of X and which country will be exporter?

c) What will happen to the price of X in country A and country B during the process

of international trade?

d) What does the price change in country A result on quantity demand, quantity

supply of domestic producers, and supply?

e) What does the price change in country B result on quantity demand, quantity

supply of domestic producers, and demand?

Using examples of your choice, discuss whether the desirability of the worldwide movement towards the market economy and away from the planned economy

Should an economics model describe reality exactly

Explain the causes of the marginal rate of substitution (MRS) if good is perfect substitutes and perfect complements.

When demand and supply change in the same direction we can unambiguously

say how the equilibrium price and quantity change. Explain using diagrams

whether the statement is true or false.