Microeconomics Answers

Elasticity of Demand: A public health issue that impacts the cost of health care individually and on a societal level is that of obesity. One of the public policy tools that policy makers have is to impose taxes to impact prices and ultimately change consumption levels of products that contribute to obesity. Sugar soda (or pop, as many say in Minnesota) is one of these products. If policy makers know the elasticity of demand for a product, they may be able to choose a tax level to raise the price enough to impact the choice to purchase soda. During a three-month period, scanner data (from grocery stores, for example) was collected on soda purchases. The price of a case of soda (24 cans) increased from $5.99 to $7.99. As a consequence, during this three-month period the total quantity of soda purchased in the region decreased from 4,395 cases per day to 2,488 cases per day. 

Suppose that Sandy can produce 10 economic reports or make 2 sales calls. Suppose Tim can produce 2 economic reports or make 1 sales call. Which of the following is CORRECT?

- The opportunity cost for Sandy of producing one sales call is 10 economics reports.

- The opportunity cost for Tim of producing one economics report is 2 sales calls.

- The opportunity cost for Tim of producing one sales call is 1/2 of an economics report.

- The opportunity cost for Sandy of producing one economics report is 1/5 of a sales call.

) Suppose the demand for a product is given by  where   is the quantity and  is the price in Ghana Cedis. Using calculus, estimate the effect of an increase in price from GH¢196.00 to GH¢250.00 on the welfare of the consumer

How do taxes affect the level of aggregate autonomous spending, The multiplier and the Equilibrium income in the economy

C= R60 million

I= R280 million

Goverment= R310 million

C = 0.75

1. Calculate the Autonomous expenditure

2. Calculate the Equilibrium level of income.

3. Draw a graph to illustrate the Equilibrium

Ketchup is a complement (as well as a condiment) for hot dogs. If the price of hot dogs rises, what happens to the market for ketchup? For tomatoes? For tomato juice? For orange juice?

XYZ Co. operates in a competitive market. Its Total Product (Q) is given as Q=f(L)= 2L, and it

takes the wage and price as given. Derive the firm's short-run demand for labor as a function of w

and p. How much labor will the firm hire if W=₵20 and P=₵100?

A company estimates that the demand for its product fluctuates with the

price it charges. The demand function is (05 Marks)

q= 280,000 – 400p

Where q equal the number of units demanded and p equals the price in dollars.

The cost of producing q units of the product is estimated by the function

C = 350,000 + 300q + 0.0015q2

i. Determine the number of units that should be produce in order to

maximize the annual profit.

ii. What price should be charged?

iii. What is the annual profit expected to equal?

Consumer surplus indicates that

Johnson and Johnson (J&J) provides mothers with safe and clinically proven mild baby

products. Amongst other products they also provide Listerine products. Due to the lack in sales

of the baby products, Johnson and Johnson decided to decrease the production of baby products

and increase the production of Listerine. Illustrate on a graph and explain the opportunity cost

of producing Listerine products.