Microeconomics Answers

In the essay, discuss how consumers, producers and government have been affected during this current COVID19 pandemic. Use examples from your own country. (Max1500 words). Follow the rubric below – have an introduction, body and conclusion.

A typical firm in​ long-run equilibrium in an industry with identical firms has a cost function given by

​C(q)=4,900+2q2.

What is the equilibrium​ price?

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

a. Solve for the factor demand functions

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

An agent consumes quantity (x₁,x2) of goods 1 and 2. Here is his utility function: 𝑈(𝑥1, 𝑥2) = 𝑥1³ 𝑥2, his budget constraint is: p1x1+p2x2=m.

(a) Calculate the agent’s Marshallian demand (x*₁ , x*₂ )

 (b) Calculate the agent’s indirect utility function.

An agent consumes quantity (x₁,x₂) of goods 1 and 2. Here is his utility function: 𝑈(𝑥1, 𝑥2) = √𝑥1 + 2 ∗ 𝑥2, his budget constraint is p1x1+p2x2 = m.

 a. Calculate the agent’s Marshallian demand (x*₁ , x*₂ ).

b. When would the agent’s consumer’s problem have a corner solution?

An agent consumes quantity (x₁,x₂) of goods 1 and 2. Here is his utility function: 𝑈(𝑥1, 𝑥2) = 2 ∗ 1 ∗ 𝑥2 + 1, 𝑝1 = 𝑝2 = $1, ℎ𝑖𝑠 𝑖𝑛𝑐𝑜𝑚𝑒 𝑚 = 20.

 (a) Calculate the agent’s Marshallian demand (x^*₁ , x*₂ ).

(b) If the government put a $1 tax on x1, which increase p1 to $2, assume p2 and m do not change, what is the demand for x1?

(c) If the government collect tax on the agent’s income, the amount of tax is the same as the tax revenue collected in (b), what is the agent’s utility? Compare it with the agent’s utility in (b). 

1. A straight line demand curve is given. What will be elasticity of demand on the mid point of this curve.