Microeconomics Answers

Suppose that the demand curve is Qd = 120 - 6p and the supply curve is Qs = 18p. Calculate the effects of a specific tax of t=2 per unit on the equilibrium, government tax revenue,consumer surplus, producer surplus,welfare and deadweight loss?

How does equilibrium value change in open economy when IM=.25Y, and X=500

You are the manager of a monopolistically competitive firm. The present demand curve you face is P = 100 – 4Q. Your cost function is C(Q) = 50 + 8.5Q².

                       i.        What level of output should you choose to maximize profits?

                      ii.        What price should you charge?

                    iii.        What will happen in your market in the long run? Explain.

The demand for company X's product is given by Q_x = 12 – 3P_x + 4P_y. Suppose good X sells for $3.00 per unit and good Y sells for RM1.50 per unit.

a)      Your manager realizes that incentive programs are important to promote the efficiency and productivity of the workforce. The manager came up with the following wage packages to induce employees’ motivation. As a head of human resources, which scheme would you suggest and which program will motivate the employees more?

·        Wage scheme 1: Each employee will start at RM 17 per hour and will work eight hours per day.

·        Wage scheme 2: each employee will receive RM 8 per hour and one-tenth of 1 per cent of profits (expected profits are RM 90,000 per day if everyone puts out maximum effort).

Do we need cash less transaction?what are the modes off transaction

You are the manager of a midsized company that assembles personal computers. You purchase most components – such as random-access memory (RAM) – in a competitive market. Based on your marketing research, consumers earning over RM80,000 purchase 1.5 times more RAM than consumers with lower incomes. One morning, you pick up a copy of The Wall Street Journal and read an article indicating that input components for RAM are expected to rise in price, forcing manufacturers to produce RAM at a higher unit cost. Based on the curve, discuss the following scenarios.

a)      Based on this information, what can you expect to happen to the price you pay for random access memory (RAM)?

b)     In addition to this change in RAM input prices, the article indicated that consumer incomes are expected to fall over the next two years as the economy dips into recession? 

À government is considering a quota and a tariff, both of which will reduce imports by the same amount. Why might the government prefer one of these policies to the other?

The government wants to drive the price of soybeans above the equilibrium price, P₁, to pr. It offers growers a payment of x to reduce their out put from Q₂ (the equilibrium level) ro Q₂, which is the quantity demanded by consumers at p. Show in a figure how larger must be for growers to reduce output to this level. What are the effects of this program on consumers, farmers, and total welfare? Compare this approach to (a) offering a price sup port of p,, (b offering a price support and a quota set at Q₁, and (c) offering a price support and a quota set at Q2.

Many countries subsidize agricultural production. In 2015, the European Union spent about €58 billion on farm subsidies through its Common Agricultural Policy. Countries may also subsidize firms that buy farm products. Assuming that specific subsidies are used, draw a diagram to show how subsidies provided to both farmers and corporate buyers of agricultural products affect the market equilibrium compared to the no-subsidy case. Who gains and who loses?