Microeconomics Answers

When AP L is positive but declining, the MP L could be (i) declining (ii) zero (iii)

negative or (iv) any of them. Which one is the correct alternatives? Explain with diagram.

) if the supply curve is q=3+1.5p what is the producer surplus if p=12?

Navel oranges are grown in California and Arizona.

If Arizona starts collecting a specific tax per orange

from its firms, what happens to the long-run mar￾ket supply curve?

Each firm in a competitive market has a cost

function of C = q + q2 + q3. The market has an

unlimited number of potential firms. The market

demand function is Q = 24 - p. Determine the

long-run equilibrium price, quantity per firm, market quantity, and number of firms. How do these

values change if a tax of $1 per unit is collected from

each firm? (Hint: See Solved Problem 8.4.) M

Each of the 10 firms in a competitive market has a

cost function of C = 25 + q2. The market demand function is Q = 120 - p. Determine the equilibrium

price, quantity per firm, and market quantity. M

The initial equilibrium is e, where the linear supply curve intersects the linear demand curve. Show the welfare effects of imposing a specific tax τ. Now suppose the demand curve becomes flatter, but still goes through pointe, so that it is more elastic at e than originally. Discuss how the tax affects the equilibrium, CS, PS, welfare, and DWL differently than with the original demand curve.

 A consumer’s weekly income is $5000, the price of a cell phone is $1250, and the price of a watch is $500. What quantity of cell phones and watches will maximize the consumer’s utility if they spend their entire weekly income on cell phones and watches? Explain your answer using marginal analysis.                  

      I.          Suppose that this consumer’s income elasticity for watches is 5.4. what does this indicate about watches? If the cross-elasticity calculates to 0.8 what does this indicate about the relationship between watches and cell phones?

The locus of points which provide the same level of satisfaction to the consumer refer to

When AP L is positive but declining, the MP L could be (i) declining (ii) zero (iii)

negative or (iv) any of them. Which one is the correct alternatives? Explain with diagram.

Q1) for a-firm how does the concept of producer surplus differ from that of profit.?

Q2) if the supply curve is q=3+1.5p what is the producer surplus if p=12?