Microeconomics Answers

The market for lemon has 10 potential consumers, each having an individual demand curve P = 101 - 10Qi, where P is price in dollars per cup and Qi is the number of cups demanded per week by the ith consumer.

A. Find the market demand curve using algebra.

B. Draw an individual demand curve and the market demand curve

A policy maker deciding how to find as the construction of a new airport he can eat the pay for it by increasing citizens taxes or by printing more money what are some of the short run and long run consequences of each option

what will happen to the equilibrium quantity and equilibrium price of renewable energy resources if energy sector improves the technology

Which one of the following statements is correct? The demand for a product of a perfectly competitive firm.

A.slopes downwards from left to right

B.slopes upwards from left to right

C. Is perfectly elastic

D. Is perfectly inelastic

Question 1

Which one of the following statements is correct? The demand for the product of a perfectly

competitive firm:

A. slopes downward from left to right.

B. slopes upward from left to right.

C. is perfectly elastic.

D. is perfectly inelastic

State whether you agree or disagree with the following statements. Give

reasons in support of your answers.

a. A competitive firm will shut down its operations in the short run if it earns losses.

b. The expansion path for a Leontiff production function is linear.

c. If a production function has constant elasticity of substitution (CES), its positive

monotonic transformation will also have CES.

d. A production function that exhibits diminishing marginal returns to inputs, necessarily

has decreasing returns to scale also

Public goods and common resources: define them and explain how their

production and use is affected by the allocation of property rights.

The short run supply curve of a company selling its goods on a competitive

market: explain how imposing some assumptions on the firm’s objectives

and on the costs’ behaviour economists derive a relationship between the

price level and the quantity of goods that a firm supplies.

Consumer surplus: define it and explain how economists derive the

concept of consumer surplus imposing some assumptions on the

consumer’s preferences and on its behaviour when choosing the allocation

of limited resources.

1.     Complete the following table.

(i)    Find out the total product (TP), average product (AP), marginal product (MP) and draw a graph of TP, AP, MP and also explain the stage of production.

(ii) if the fixed price of land is 1000 and the firm pays 750 to each worker then calculate, Fixed cost, variable Cost, Marginal Cost, Average Variable Cost (AVC), Average Fixed Cost(AFC), and Average total cost(ATC).

Labor

Total Product

Average Product

Marginal Product

Average Fixed Cost

Average Variable Cost

Average Total Cost

0

0

1

8

2

18

3

25

4

30

5

33

6

34