Microeconomics Answers

 According to Bobber: by demand we mean the various quantites of a given commodity or service which consumers would buy in one market in a given period of time at various prices

Fresh Food has recently carried out a survey of the demand for their seasonal fruits. They observed the following

outcomes over the last seven months:

Quantity

Sold Price Advertising

8500 $ 2 $ 2,800

4700 $ 5 $ 200

5800 $ 3 $ 400

7400 $ 2 $ 500

6200 $ 5 $ 3,200

7300 $ 3 $ 1,800

5600 $ 4 $ 900

Regression (Equation)

QSold = 8536.213882 - 835.7223514 Price + 0.592228496 Advertising

A. Estimate sales when the price is $50 and advertising is $100,000, stating any assumption that you need to make.

B. If the firm charges $50 and cost per unit is $30 but increases advertising to $110,000, what conclusions can you derive

in terms of revenues and profits?

A firm has a Cobb-Douglas production function given as q=AX1αX2β

a. Solve for the factor demand functions for labour (X1) and Capital (X2)

b. If the firms’ competitive output price is p find the wage rate

c. What is the share of the firm’s revenue paid to labour and capital?

d. If α=0.6, β=0.2 and A=1 find the LR labour and capital demand curve equations

4. Suppose a firm produces according to the production function Q = AL0.6K0.2, and faces wage rate ₵10, a rental cost of capital ₵5, and sells output at a price of ₵20.

a. Obtain and expression for the factor demand functions if A=1.

b. Compute the profit-maximizing factor demands for capital and labour if A=1.

5. In the short run, a competitive firm has a production function,

Q = f(L) = 2.6667L0.75. The output price is $4 per unit and the wage is $5 per hour. Find the short-

run labor demand curve of the firm.

Suppose that the citizens of a country are advised by the Health Authorities on the health benefits of consuming fresh ginger.

Demonstrate and explain, using a clearly labelled diagram, the effect of this information on the equilibrium price and equilibrium quantity of fresh ginger.

Do we need cashless transaction.?what are it's transactions

Fresh Food has recently carried out a survey of the demand for their seasonal fruits. They observed the following

outcomes over the last seven months:

Quantity

Sold Price Advertising

8500 $ 2 $ 2,800

4700 $ 5 $ 200

5800 $ 3 $ 400

7400 $ 2 $ 500

6200 $ 5 $ 3,200

7300 $ 3 $ 1,800

5600 $ 4 $ 900

Regression (Equation)

QSold = 8536.213882 - 835.7223514 Price + 0.592228496 Advertising

A. Estimate sales when the price is $50 and advertising is $100,000, stating any assumption that you need to make.

B. If the firm charges $50 and cost per unit is $30 but increases advertising to $110,000, what conclusions can you derive

in terms of revenues and profits?

Distinguish between substitutes and complements using cross price elasticity coefficients to motivate your answer.

Q.1) Fresh Food has recently carried out a survey of the demand for their seasonal fruits. They observed the following outcomes over the last seven months: Quantity Sold Price Advertising 8500 $ 2 $ 2,800 4700 $ 5 $ 200 5800 $ 3 $ 400 7400 $ 2 $ 500 6200 $ 5 $ 3,200 7300 $ 3 $ 1,800 5600 $ 4 $ 900 Regression (Equation) QSold = 8536.213882 - 835.7223514 Price + 0.592228496 Advertising A. Estimate sales when the price is $50 and advertising is $100,000, stating any assumption that you need to make. B. If the firm charges $50 and cost per unit is $30 but increases advertising to $110,000, what conclusions can you derive in terms of revenues and profits

Case I: Elasticity Part I Demand and Supply are represented by the functions below: QD = 8250 – 325P QS = 850 + 175P Exercise: 1. Compute quantity and price in equilibrium 2. Determine what would happen if the price changed to 12$ 3. Plot the graph representing the first two questions. 4. Compute the elasticity of both curves assuming the price would increase from 22$ to 24$. 5. Plot the graph for question 4.

Explain three types of internal economies of scale