Microeconomics Answers

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?

1) A market has an inverse demand curve and five firms, each of which has a constant marginal cost of If the firms form a profit-maximizing cartel and agree to operate subject to the constraint that each firm will produce the same output level, how much does each firm produce?

2) What is the duopoly Nash-Cournot equilibrium if the market demand function is Q = 4,000 - 400p, and each firm's marginal cost is $0.28 per unit?

Holding the number of firms in the market fixed what happen to the price as the number of non-cartel members rises?why?

1. Lovers of classical music persuade Congress to impose

a price ceiling of $40 per concert ticket. As a result of

this policy, do more or fewer people attend classical

music concerts? Explain.

Fill in the gaps in the table below

Quantity of           Total Output     Marginal Product     Average product of
Variable of input                      Variable input        Variable input
0                        0                   -                  -
1                        225
2                                                               300
3                                           300
4                        1140
5                                           225
6                                                                225

    

Does the marginal utility of x diminish, remain constant, or increase as the consumer buys more x?