Microeconomics Answers

At what ammount does the consuption diminishing mariginal utility?

Due to substantial increases in prices in Country A, the real income level of the population in Country A decreases. Show on a diagram how the decrease in the income level in Country A will affect the demand for meat, which is a normal good. Also indicate how the equilibrium price and equilibrium quantity of meat will change in Country A. The direction of any changes should be clearly indicated using arrows. Note that your diagrams should be properly annotated and that marks will be deducted for any missing labels on your diagram.

Describe the term “Economies of scale

 Name and describe three tax methods 

Suppose that the marginal cost of a firm for a given level of output is Birr 30 and its AVC is Birr 40. In which stage of production is the firm operating?

Derive the long run supply curve of a constant cost perfectly competitive industry

Radha is awake for 100 hours in a week. She is earning Rs.1200 per week by working for 60 hours. This year she gets a

scholarship of Rs.500 per week and hercompany also raises her wage to Rs.40 per hour. Analyze the impact of this

change in her income & on her labor supply.

Using the concept of economies and diseconomies of scale, explain the shape of a firm’s long run average

cost curve. How are the short run average cost curvewith the long run average curve?

For the following cost function TC = a + bQ – cQ2 + dQ3, determine the equations for TFC, TVC, AFC, AVC, AC, MC. (a,b,c,d> 0)

Paul’s lawn- mowing service is a profit maximizing, competitive firm. Paul mows lawns for $27 each. His total cost

each day is $280, of which $30 is a fixed cost. He mows 10 lawns a day. What can you say aboutPaul’s short-run decision

regarding shutdown and his long-run decision regarding exit?