Microeconomics Answers

Thanos has a monopoly in the market for stones. The market demand curve for stones is Q = 120 − 2P. Currently,A new technology is available that would reduce the marginal cost of making stones to $20 per stone for an output level greater than 50 units (but for the first 50 units, the marginal cost is still $30).

1. If Thanos is still the only supplier of the stone, what is his maximal willingness to pay for this technology?
2. Captain Marvel,who also has the ability to produce infinity stones, Her marginal cost of production is $29. Suppose that Thanos and Captain Marvel engage in Bertrand competition. However, the name of Thanos deserves some respects; if they charge the same prices, then all consumers will buy from Thanos. What is the equilibrium market price after Thanos has acquired the new technology?
3. Facing competition from Captain Marvel,what is Thanos’ maximal willingness to pay for the new technology? Does competition strengthen or weaken Thanos’ incentives to acquire the new technology?

For each if the following events, describe the likely effect on the country’s production possibilities boundary (PPB). Start with a PPB like the one below and draw the likely change.

a. Suppose the country has a 10-year civil war that destroys much of its infrastructure.

Use the 3 point curve to draw a new production possibilities boundary on the graph reflecting the change in the infrastructure. Properly label this line. Place end points one on horizontal and one on vertical axes.

In a small country near Baltic sea there are three commodities

Analyze whether social benefits, social costs, etc. are affected by vaccine shortage?

Discuss the decomposition of price effect into income and substitution effect

1. A competitive firm's production function is q=7LK. What is its marginal revenue prod uct of labor? (Hint: MPL = 2K)

2. What effect does an ad valorem tax of a on the revenue of a competitive firm have on that firm's demand for labor?

Give a picture of Positive externalities on consumption: https://drive.google.com/file/d/1KitPcjAWw291BIcMJPsLMnqr7elbQ5-p/view?usp=sharing

Correct the explanation below to be correct and complete.

"Competitive market equilibrium is reached at the free market and Qe vaccination is carried out throughout the year. Because at this point, the marginal private benefit curve (MPB) of the health care facility is equal to the marginal social cost (MSC).

However, as noted above, vaccination has a marginal external benefit even for the unvaccinated, and this benefit is not taken into account by health care facilities.

From a social perspective, the marginal social benefit (MSB) equals marginal social cost (MSC). Thus, the quantity optimum immunization level is achieved at the social optimum, but not at Qe.

In the presence of positive externality, the market will always produce less than the socially optimal level. Without government regulation, society would suffer a welfare loss equal to the triangle."

A competitive firm has a three factor production function f (x, y, z) = (x + y )^1/2 Z^1/3. the factor prices used to be w_x= 4, w_y = 2, and w_z = 1.suppose that that price of factor y doubled while the other two remain same. then the minimum cost of production will be :

A) doubled

B) increase by more than 50 % but less than 100 %

C) increase by less than 50 %

D) stayed the same

Suppose you own an outdoor recreation company and you want to purchase all-terrain vehicles (ATVs) for your summer business and snowmobiles for your winter business. Your budget for new vehicles this year is $480,000. ATVs cost $12000 each and snowmobiles cost $16,000 each.

a. Draw a budget line for your purchase of new vehicles.

b. What is the opportunity cost of one ATV?

c. What is the opportunity cost of one snowmobile?

The inequality in the supply of COVID-19 vaccines between rich and poor countries is creating a serious “oversupply and undersupply” situation.

Meaning?