Microeconomics Answers

Explain the concept of derived demand of the factor of production.

Campare and contrast marshallian theory with the ricardian theory of rent.

What causes a backward bending labour supply curve?

EXPLAIN WITH THE HELP OF GRAPH, A monopolist has a cost

function 200q + 15Q2

and faces a demand function given by P= 1200 – 10Q. Calculate total

revenue, marginal revenue, output and price that maximize profit-maximizing? What is its

maximal profit?

Construct graph and explain income and substitution effect of a price change for food

(on X-axis) and cloth (on Y-axis) when a) food is a normal good and b) food is an inferior

good. Suppose price of food is continuously decreasing, with no change in the price of cloth

and income, what curves can you derive from this change?

How to drive indirect utility function and expenditure function, using X raised to the power of alpha and Y raised to the power of beta [X^alpha multiple by Y^beta] as our Utility function, and Px•X + py•Y= I as our budget constrain

Hi

Can somebody help with me with the below? 

Thanks in advance

Information:

Q = 33.33 - 0.000004167 * P + 0.04167 * PCO2 - 0.4167 * r - 0.00833 * Pel, where

Q is the quantity sold, P is the price, PCO2 is the price of the EU's CO2 quotas, measured in euros per tonnes, cf. Chart 1, r is the banks' average lending rate measured in per cent. pa., and Pel is the Nordpool wholesale price of electricity excl. network and system tariffs as well as charges, measured as Danish kroner per MWh (mega-watt-time).

P can here be set to DKK 4,000,000, PCO2 can be set to 62, r to 2.37 and Pel can be set to 250.

Question:

Calculate the price elasticity as well the cross-price elasticities with regard to as well The CO2 price, the interest rate and the electricity price. Then discuss whether the signs on the price elasticities can be justified.

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. if the fixed price of land is 1000 and firm pay 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).

A cement factory is located near a river which is also used for training sessions by a team of swimmers. When the factory dumps chemicals in the water, the river cannot be used for swimming.  Experts estimate that it would cost $100,000 to install a purifying equipment that would completely eliminate the chemicals from the river. Moving the swimming team to train at a different location would cost $90,000 and thus the purifying equipment would not be necessary.

2.1. Identify the 2 externalities. (1 point)

2.2. What result (theorem) can be applied to fix these externalities? Why might this theorem work in this case? (1 point)

2.3. What solution would the two parties choose if the right to a clean river is granted to the swimming team and who would bear the costs of fixing the externality problem? Briefly explain. (1 point)

(1)(a) What is 3 rd degree price discrimination? Briefly identify the conditions necessary for a successful

implementation of this profit maximizing strategy.

(b) A seller produces output and sells in two distinct markets with the following demand curves:

Q1 = 16 – P1 , Q2 = 20 – 2P2. If the total cost for the firm is 10 + 2Q, determine the quantities of

output the firm would produce and sell in each market. What prices would the firm charge in each of

the two markets?

(c) Find the price elasticity of demand in each submarket and briefly comment on how the results relate

to the relative prices charged in each market.