Microeconomics Answers

The following table shows the daily supply and demand for chicken burgers at a sporting event: Price (RM) Quantity demand (units) Quantity supply (units) 4.00 110 420 3.50 160 380 3.00 240 240 2.50 320 160 2.00 410 96 a) What is the equilibrium price of chicken burgers? Discuss your reason. b) If the organizer of this sporting event decide to set the price at RM4.00, how many chicken burgers should be sold? Write your answer. c) One of the burger stall in this sporting event is offering free fries for every 3 chicken burgers purchased but customers. Describe how does this offer may affect customers demand?

1.     Given utility function U(x,y) = X^1/4Y^3/4, Where price of X=8Br and Price of Y = 2 Br and income of the consumer is 480 Br;

A.    Compute the utility maximizing level of X and Y

B.    Calculate the marginal rate of substitution of X to Y at equilibrium and interpret the result

C.    Compute the total utility at equilibrium

a The values of consumer price index (CPI) for 2005 and 2018 are 78.8 and 272.6 respectively while the average annual income of poultry farmer is given as N216,000 and N360,000 accordingly. Comment on the welfare of the poultry farmer using the purchasing power of the income received between, the two years under consideration.

 Use a graph to explain the effect of an imposition by the government of a maximum price in the face mask market.

State (a) a positive economic statement of your choice, and then (b) a normative economic statement relating to your first statement.

A firm demand function for its output is p=400-0.5q. To maximize sales revenue,what price should be charged

Discuss the income and substitution effect of a price change in case of a normal good?

Q-2 Assume that the market for soaps in a small closed economy is initially characterized by the following domestic demand and domestic supply equations where Q is quantity and P is price.

Demand: Q = 120 – 2P & Supply: Q = 4P – 48. Find the equilibrium price, quantity, consumer surplus & producer surplus in the market for soaps.

suppose we are given a production function: q=[al^p +(1-a)k^p ]^1/p

Please show that MP_k=(1-a)(k/q)^p-1 and MP_l=a(l/q)^p-1

Please derive the RTS

Please derive the elasticity of substitution a.

Does this production function exhibit constant, increasing, or decreasing returns to scale?

suppose the production function for trucks is given by: q=kl+6l² -(1/3)l³

where q represents the weekly quantity of trucks produced, k represents weekly capital input, and l represents weekly labor input.

a. Suppose k = 45; at what level of labor input does this average productivity reach a maximum? How many trucks are produced at that point?

b. Again assuming that k = 45, at what level of labor input does the total production reach a maximum? How many trucks are produced at that point?