Microeconomics Answers

Draw a set of indifference curves for a person that is risk neutral (a person that does not care about risk one way or the other).

Suppose the government imposes a price cap on bottle show the effect in bottled water market

The quantity supplied of a commodity at a price of Birr 10 per unit is 500 units. Its price elasticity of supply is 0.5 A) Calculate the price at which its quantity supplied is 600 units. B) What quantity of this commodity will the seller supplied when the price rise at Birr 12 per unit? C) What quantity of this commodity will the sellers supply when price rises by Birr 4 per unit?

What is the main causes of monopoly power of producers in an economy

compare and contrast the difference between perfect competition market and monopolistic market in an economy

Suppose you are a manager of a County government project that is meant to provide rent-regulated housing units in low-income settlements. Using your knowledge of equilibrium, advice the Governor whether this policy will be a success.

Suppose you are a manager of a County government project that is meant to provide rent-regulated housing units in low-income settlements. Using your knowledge of equilibrium, advice the Governor whether this policy will be a success.

Consider the following equations for a small open economy for both the goods and money markets.

C = 3000 + 0.8Y^d; T = 1000 + 0.3Y; G = 6000; TR = 500; I = 4000 + 0.24Y – 100r; M = 3000 + 0.2Y; X = 2000; L_P = 1000 + 0.15Y; L_T = 2000 + 0.25Y – 15r; Ls = 1000 – 35r; MS = 40,000; P= 4

a.     Derive both the IS and LM equations for the economy and compute the Equilibrium level of Income and Interest Rate.

b.    At this equilibrium level of income and interest, compute the levels of disposal income, total transactions demand for money, investment demand and the value of net exports.

c.     Suppose the government raises govt. expenditure by 20% in order to increase aggregate demand. Show how this policy results in the crowding out effect.                                                                             

a.     Discuss using the IS-LM framework, how President Uhuru’s tax cuts and Central bank’s expansionary monetary policy may steer the economy out of Recession caused by Covid-19. Ensure that you draw diagrams and discuss the long run effects too. b.    Answer True or False, then justify your response with practical economic examples:                                             

i.      Open Market Operations are more effective in a developing country like Kenya when compared with the Bank Rate Policy.                                                                          

Since Quantitative credit control instruments are more targeted and more objective, it is always advisable that they be applied at all times over the Selective instruments

Employment and Social Development Canada (ESDC) reported that the Canada mean

unemployment insurance benefit was $573 per week (Government of Canada, 2020). A

researcher in the state of Manitoba anticipated that sample data would show evidence that mean

weekly unemployment insurance benefit in Manitoba was below the national average.

a) Develop appropriate hypotheses such that rejection of H 0 will support the researcher’s

contention.

b) For a sample of 100 individuals, the sample mean weekly unemployment insurance

benefit was $566 with a sample standard deviation of $80. What is the p-value?

c) At α = 0.05, what is your conclusion?

d) Repeat the preceding hypothesis test using the critical value approach.