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You plan to upgrade your computer skills by taking a training course at the end of this semester. If you do, you wont be able to take your usual job that pays #16,000 per month and you wont be able to live at home for free. The cost of your tuition will be #20,000, equipment #2000 and living costs #10,400. What is the opportunity cost of your summer training course?
15 workers, 15 stations, 138 bagels
20 workers, 20 stations, 227 bagels
25 workers, 25 stations, 246 bagels
30 workers, 30 stations, 260 bagels
35 workers, 35 stations, 270 bagels
Both firms are producing at a level that maximizes profits
Both firms are producing at a level that minimizes average total costs
Both firms are receiving the maximum payoff available in their payoff matrix
Together the firms have chosen a level of supply equal to the level of aggregate demand
Neither firm has an incentive to deviate from its strategy
i. Which type returns to scale is present in TSF's roadrunner trap production?
ii. If TSF wishes to maximize its eurrent profit, what are the optimal quantities of K and L that TSE should employ?
Suppose that the price of materials used to produce computer hardware, such as graphics cards, is decreased. Show what occurs to price, quantity, consumer surplus, producer surplus, and total surplus in the market for computers graphic cards using a supply-and-demand diagram (draw a graph). Furthermore, provide five explanations for what occurred.
I. High fixed costs create barriers to entry
II. Marginal cost exceeds average cost
III. Long-run average total cost decreases as output increases
I
I and II
I and III
II and III
I, II, and III
Suppose a consumer consuming two commodities X and Y has the following utility function U= 10X0.4Y0.6. If price of good X and Y are 2 and 3 respectively and income constraint is Birr 50, then find
Find quantities of X and Y which maximize utility
Show how the rise in income to Birr 100 will affect the quantities of X and Y
Assume a hypothetical consumer consumes orange and banana. The price of orange is 2 and price of banana is 4 and the consumer budget is birr 20 for the two goods. Where: QX is quantity of orange, QY is quantity of banana and TUX and TUY is total utility from consuming orange and banana respectively.
Orange, Price=2birr
Banana, Price=4birr
Qx
TUx
MUx
MUx/Px
Qy
TUy
MUy
MUy/Py
1
6
1
6
2
10
2
22
3
12
3
32
4
13
4
40
5
13
5
45
6
11
6
48
Based on the given information, answer the following questions.
Compute the marginal utility of the of the two goods
At what amounts consumption does diminishing marginal utility starts to occur for the two goods?
Determine the quantities of the two goods that the consumer should buy in order to maximize his total utility?
When will the consumer be at equilibrium?
Nimbus Company makes brooms and then sells them door to-door. Here is the
relationship between the number of workers and Nimbus’s output during a given day:
workers- 0 1 2 3 4 5 6 7
output- 0 20 50 90 120 140 150 155
a. Fill in the column of marginal products. What pattern do you see? How might you
explain it?
b. A worker costs BDT100 a day, and the firm has fixed costs of BDT200. Use this
information to fill in the column for total cost.
c. Fill in the column for average total cost. (Recall that ATC = TC/Q.) What pattern do you
see?
d. Now fill in the column for marginal cost. (Recall that MC = ΔTC/ΔQ.) What pattern do
you see?
e. Compare the column for marginal product with the column for marginal cost. Explain
the relationship.
f. Compare the column for average total cost with the column for marginal cost. Explain
the relationship.
The income elasticity of demand for good measures the responsiveness of _____to a change in ______
