Microeconomics Answers

The weekly demand for Kelewele among the 2018 batch of MBA students at UPSA is Qdx =900–10Px +0.2I+5Py –4Pz

Where Qdx is the quantity demanded of Kelewele,

Px is the price of Kelewele per lb,

I is the consumer income in Ghana Cedis,

Py and Pz are the prices of two goods that are related to Kelewele.

 a) Based on the demand function above, is

d) What is the equation of the demand curve if consumer incomes are GHȼ 40, the price of good Y is GHȼ 20 and the price of good Z is GHȼ 27? 1 Mark

e) Graph the demand function for Kelewele from d)

Now suppose the weekly supply function for Kelewele at UPSA campus

is QSx = -260 + 10Px – 2Pi

Where QSx is the quantity supplied of Kelewele and Pi is the price of inputs used in preparing Kelewele.

f) What is the supply function if input prices are GHȼ 20?

g) Graph the supply curve from f)

1.    In a competitive market individual firms take as given

a.     the level of output they produce.

b.    the price they receive for their output.

c.     both the level of output they produce and the price they receive.

d.    neither the level of output they produce nor the price they receive.

1.    In a competitive market individual firms take as given

a.     the level of output they produce.

b.    the price they receive for their output.

c.     both the level of output they produce and the price they receive.

d.    neither the level of output they produce nor the price they receive.

   From the importing country’s point of view, a tariff is better than a quota because 

a.      a tariff has a smaller effect on imports than does a quota.

b.     a tariff has a larger effect on imports than does a quota.

c.      the tariff generates tax revenue for the government.

d.     both reduce imports but only quotas increase price.

1.    For a country, the domestic price of a product will equal the world price.

a.     when the domestic supply of the product increases.

b.    when the country allows free trade.

c.     when trade restrictions are imposed on the product.

d.    if the country chooses to export and not import the product.