Microeconomics Answers

As announced in the 2021-2022 National Budget, the Fijian Government is supporting formal and informal sector employees on Viti Levu who are affected by the pandemic through monthly payments of $120 for a period of six months (August 2021 – January 2022). The Fiji Sun dated 23^rd August, 2021 reports “Attorney-General and Minister for Economy yesterday tweeted that: “Days ahead of schedule, we have met the once-in-a-century COVID-19 crisis with one of the largest assistance payouts in history. $72m was paid in unemployment benefits to 200,000 Fijians. In the coming days, we’ll reach 60,000 more bringing the total payout to around $94m.”

Discuss the ways in formal and informal employees benefits from this COVID-19 Unemployment Assistance from the Fijian Government.

Discuss some ways in which the unemployment scheme done by the government benefits the informal and formal employees in Fiji in this pandemic.

What is the law of demand

Let X = (−∞,∞) × R L + and assume that the preferences are strictly convex (so that Walrasian demand is signle-valued) and quasilinear. Normalize price of good 1 to be p1 = 1 (a) Show that the Walrasian demand functions for goods 2, . . . , L are independent of wealth w. [Hint: you have to show that when x(p, w) is Walrasian demand at prices p and wealth w, x(p, w) + αe1 is the Walrasian demand at prices p and wealth w + α for any α > −w]. (b) Argue that the indirect utility can be written in the form v(p, w) = w + γ(p) for some function γ(·). [Hint: Recall from the previous assignment that quasilinear preferences can be represented by a utility function that takes the form u(x1, . . . , xL) = x1 + φ(x2, . . . , xL) for some function φ(·).

Homothetic production function includes homogeneous production function as a special case . Justify this statement.