Microeconomics Answers

Explain clearly with the aid of a graph the income and substitution effect of a price fall for a normal good

A monopolist sells its product in two isolated markets with demand functions

            P1 = 32 − Q1 and P2 = 40 − 2Q2

The total cost function is TC = 4(Q1 + Q2).

(a) Show that the profit function is given by

       π = 28Q1 + 36Q2 − Q12 − 2Q22

(b) Find the values of Q1 and Q2 which maximise profit and calculate the value of the

maximum profit. Verify that the second-order conditions for a maximum are satisfied

Anne would produce 10 robots a week working for an employer that recently offered her a position. Each robot requires $50 in material inputs and sells for $100. For Anne, this would mean no longer day trading, from which she makes $450 per week. Which of the following wage rates might Anne and the robot factory agree to?

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If c=R20 billion, I=R30 billion, g=R25 billion, x=R15 billion, z=R12 billion, c=0,75 the value of the multiplier is?

Income of a person is 8000 and he uses 60 units of a commodity. Calculate income elasticity of       demand when the income increased by 30% and consumption of the good is decline by 50%

if on the production possibility curve show that the particular country is producing a large amount of tertiary goods than the manufactured good, how do we describe them in terns of;

-type of economy

-utilization of resources

-common type of business activity would expect to find in this economy

-distribution of national income(wealth) and

-techniques of production

how do we interpret the profit maximizing point using the graph

Describe the nature of the goods produced by a monopolistically competitive firm. (10 MARKS)

Describe and give some explanations about 2 factors that would cause most companies' labor demand to move, as well as how this would influence equilibrium wages and the value of labor's marginal product.