Microeconomics Answers

Which of the following statements are positive and

which are normative:

a An increase in productivity will increase living

standards.

b The government should raise taxes and spend the

money on providing additional healthcare services.

c Unemployment is efficient under some 

circumstances.

d Everyone should give to charity.

You plan to upgrade your computer skills by taking a training course this summer. If you do, you won’t be able to take your usual job that pays a6,000 for the summer and you won’t be able to live at home for free. The cost of your tuition will be a2,000, equipment a200 and living costs a1,400. What is the opportunity cost of your summer training course?

Judy’s and Dan’s demand schedules for cola are: Quantity demanded by Price Judy Dan (cents per carton) (cartons per week) 10 12 6 30 9 5 50 6 4 70 3 3 90 1 2 If Judy and Dan are the only two individuals, what is the market demand for cola?

The estimated production of an organisation is 500000 units. The standard man hours required to produce each unit is 5 hours. The past experience show that the workability of each employee in a man hours is 2000 hours per year . How many workers are required to produce estimated units

It has been reported that the world demand for chocolate is increasing at a time when the supply of cocoa beans, the raw ingredient required to produce chocolate, is not as large as expected. Explain, with the help of a diagram, the likely effects of these changes on the world market for chocolate products. 

Very high consumption of chocolate can lead to health problems such as obesity and diabetes, especially amongst young children in developed economies.  Discuss what is likely to be the most effective policy to reduce

these problems. 

Assume that u r from anyone from the following family how can u utilize the limited resources to fulfill your needs a)family farm b)petty shop c)flower vender

In a monopoly market, there are 2 consumers, their demand functions are: Q = 5 – p and Q = 10 - 2p. the monopolist ‘s cost function is C = 0.5q, and he decide to implement the two-part tariff strategy, i.e. each consumer pays a fixed/entry fee (a) and a price (p) for each unit consumed: T(q) = a + pq.

1. At a given price “p”, what is the fixed fee “a”?
2. What is the optimal fixed fee “a” and price “p”?

Q.1 A producer faces a fixed cost of Rs. 50 and a variable cost

Rs. 5 per unit of output when he produces less than 200 units of

output.

• Assuming that total cost function is linear, determine the

equation of the total cost of function.

• What is the break-even level of output if the price of output is

Rs. 10 per unit. Also draw the relevant graphs.

• Determine the producer’s net revenue if output is 12 units and

the price of output is Rs. 5, Rs. 10 and Rs. 15 respectively.

Food delivery is not a new trend of business, but it becomes newly important when Movement Control Order (MCO) was implemented since March last year in Malaysia. Discuss how the implementation of MCO affect the demand of food delivery in the market (support your answers with a diagram). What do you think is the elasticity of demand for food delivery during the MCO period? Give your reason. If the food delivery company would like to increase the revenue during the MCO period, explain what can the company do with the delivery charges?