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If a small percentage decrease in the price of chocolate causes a larger percentage decrease in the quantity supplied, what happens
Jason has the following utility function: U = F2C where F is food and C is clothing. Clothing is measured on the vertical axis while food is measured on the horizontal one.
Derive Jason's Marginal Rate of Substitution.
Does his Marginal Rate of Substitution stay constant along one of his indifference curves? Explain your answer clearly.
A survey indicated that strawberry is Pakistan’s favorite ice cream flavor. For each of the following, indicate and discuss the possible effects on demand, supply, or both as well as equilibrium price and quantity of strawberry ice cream. (Also use graphical analysis for explanation)A new report by the International Medical Association reveals that chocolate does, in fact, have significant health benefits.
The short-run cost function of a company is given by the equation
TC = 200 + 55q
where TC is the total cost and q is the total quantity of output, both measured in thousands.
What is the company’s fixed cost?
If the company produced 100,000 units of goods, what would be its average variable cost?
What would be its marginal cost of production?
What would be its average fixed cost?
A painting company has a fixed cost of RM200 and the following schedule for variable costs. Calculate average fixed cost, average variable cost, and average total cost for each quantity. What is the efficient scale of the painting company?
Quantity of houses painted per month
1
2
3
4
5
6
7
Variable cost (RM)
10
20
40
80
160
320
640
The utility from wealth (𝑤) for an individual is given by 𝑢(𝑤) = √𝑤. The individual owns a risky asset that is equally likely to yield either Rs. 400 or Rs. 900. The risk premium of the asset (in Rs.) is
You were planning to spend Saturday working at your part-time job, but a friend asks you to go for picnic. What is the true cost of going to picnic? Now suppose you had been planning to spend the day studying at the library. What is the cost of going to picnic in this case?
Discuss the role of fiscal policy in maintaining macro economic stability, rapid economic growth and a large market for insurance?
The demand function for a particular good in competitive market is given by y = a + bP. What are the associated direct and indirect utility functions?
You are a manager of the firm that produces and markets a generic type of soft drink in a competitive market.In addition to the large number of generic products in your market,you also compete against major brands such as coca cola and pepsi.Suppose that due to successful lobbying efforts of sugar producers in kilombero,parliament is going to levy a $0.50 per pound tarrif on all imported raw sugar-the primary input for your product.In addition,Coke and Pepsi plan to launch aggressive advertising campaign designed to persuade customer that their branded products are superior to generic soft drinks.How will these events impact the equilibrium price and quantity of generic soft drinks? (10 points)
