Microeconomics Answers

Suppose that the market demand for facial mud packs are given as follows: P = 2,200 – Q.

Mud packs can be produced at no cost. Determine the level of output that would be produced by each firm in a Cournot duopoly in the long run. Calculate the price charged for mud packs. Show all calculations.

Suppose that a consumer consumes only two products namely Beer and

Hamburgers. The price of Beer is R40 and the price of Hamburgers R120. The

consumer receives a monthly income of R1200.

8.1. Based on the information regarding the price of the two products

consumed by and the monthly income of the consumer, graphically

illustrate the consumers budget line. Let Beer be on the Y-axis and

Hamburgers on the X-axis. Marks will be allocated for the calculated value

of the points of intersection. (4)

8.2. Illustrate by aid of a graph how the budget line will If the price of

Hamburgers decreases from R120 to R100.

1． Draw the figure of the market equilibrium for the wheat market. Show what will happen if pesticide cost increases.

2. Consider a consumer who has $100. The price for food is $1 /unit. The price for clothing is $2 /unit. Draw the budget line for this consumer. And draw a new budget line when the consumer’s wealth increased to $200 and the price of clothing increased to $4 /unit.

3. The demand curve is p=10-q. Calculate the consumer surplus and the total expenditure if the market price is 6. Calculate the consumer surplus again if the market price is 4.

1． The demand curve is p=10-q. Calculate the consumer surplus and the total expenditure if the market price is 6. Calculate the consumer surplus again if the market price is 4.

2. Consider a consumer who has $100. The price for food is $1 /unit. The price for clothing is $2 /unit. Draw the budget line for this consumer. And draw a new budget line when the consumer’s wealth increased to $200 and the price of clothing increased to $4 /unit.

3． Draw the figure of the market equilibrium for the wheat market. Show what will happen if pesticide cost increases.

What would happen to the equilibrium price and quantity of chewing gum if income decreased and more firms started producing chewing gum?

Both coffee and tea are perfect substitute to each other. Explain how the increase of salary for Mr. John who is a coffee lover would affect:

1) his consumption on coffee

2) how would Mr John react to his consumption of other goods that are considered complementary such as a bowl of noodle as his income increases

explain the effect of the tax has on consumer surplus and producer surplus