Microeconomics Answers

suppose that your demand schedule for pizza is follows

pice: $8,$10,$12,$14,$16

quantity demanded ( income $16.000): 40,32,24,16,8

quantity demanded (income $20.000): 50,45,30,20,12

a. use the midpoint method t calculate your price elasticity of demand as the price of pizza increases from $8 to $10 if (i) your income is $16,000 and (ii) your income is $20,000.

b. calculate your income elasticity of demand as your income increases from $16,000 to $20,000 if (i) the price is $12 and (ii) the price is $16

As a Production Manager of a manufacturing firm that produces both an elastic good and an inelastic good, illustrate to a new board of the organisation the relationship between price elasticity of demand and total revenue, and how the elasticity concept can be used to maximise revenues of both commodities? Illustrate your answer using relevant diagrams of elastic and inelastic goods.    

Singapore hotels 51% full in Feb 2020, room revenues plunge 40%:

STB

SINGAPORE hotels were only half-filled in February, resulting in a 40 per cent plunge

in room revenues, as coronavirus fears threaten to bring the global travel industry to a

grinding halt, according to data from the Singapore Tourism Board (STB).

While the average room rate in February 2020, at S$230 per night, saw a 2.3 per cent

year-on-year gain, the revenue per available room was down to S$117, representing a

41 per cent year-on-year drop. These statistics came ahead of widespread border

closures and national lockdowns across the world, as it was in March that the Covid-19

outbreak was declared a global pandemic by the World Health Organization.

(iii) Given that a 2.3% rise in the average room rate caused a 41% fall in revenue per

room, deduce the price elasticity of demand for hotel rooms. Use a relevant factor

of price elasticity of demand and a diagram to justify your answer.

(6 marks)

find the equilibrium level income and rate of interest from the following information

C=40+0.8Yd, 110-5r, T=50, G=50, Md=0.2y-5r, Ms=100

illustrate the relationship between price elasticity of demand and total revenue, and how the elasticity concept can be used to maximise revenues of both commodities? Illustrate your answer using relevant diagrams of elastic and inelastic goods.

As a production of a manufacturing that produces an elastic and inelastic good,illustrate to a new board of the organisation

Suppose that a firms out put is given by: q = αLK2 Where α is a productivity factor.

i. Specify the marginal products of labour and capital.

ii. If the cost function is C = wL + rK. Specify the quanitites of capital and Labour that minimize costs?

Suppose widegts have a price elasticiyt of demand equal to -1.95 and a cross elasticitiy of demand equal to 2 with dundles. What are the pricing options for a firm that sells widgets? Explain.