Microeconomics Answers

I. Illustrate the link between the cost-minimization problem and total cost curve. What would happen to the total cost curve if the firm increases level of output?

Economics is the study of how?

briefly describe how governments are involved in creating monopolies (10 marks)

P = 100 – Q. where P is the price per calculator in dollars and Q is the number of calculators purchased per month. If the price is UD$ 30, how much revenue will calculator makers get each month? Find the price elasticity of demand for calculators at this point. 

On contrary, why should retailers such as fruit and veg not keep too much inventory? 

The monthly market demand curve for calculators among engineering students is given by 

P = 100 – Q. where P is the price per calculator in dollars and Q is the number of calculators purchased per month. If the price is UD$ 30, how much revenue will calculator makers get each month? Find the price elasticity of demand for calculators at this point. What should calculator makers do to increase revenue?

Complete the table for TC, AC, AFC, AVC

The monthly market demand curve for calculators among engineering students is given by 

P = 100 – Q. where P is the price per calculator in dollars and Q is the number of calculators purchased per month. If the price is UD$ 30, how much revenue will calculator makers get each month? Find the price elasticity of demand for calculators at this point. What should calculator makers do to increase revenue?

Use the labor-leisure model to analyze the effect on hours of work of a law requiring employers to pay “time-and-one-half” (that is, 1.5 times the straight-time wage) for hours worked over 40 per week. (A) Draw a budget constraint for someone earning $8.00 per hour who receives $100 a week in non- labor income. And total available hour is 100 per week excluding sleeping or going to church. What now happens to the budget constraint with the time-and-one-half requirement? (B) Given your answer to (A), draw an indifference curve so that, given the original budget constraint, the person is working 40 hours per week. What now happens to hours of work given the new budget constraint? Draw an indifference curve to show this phenomenon. Have hours of work increased or decreased as a result of the overtime law? Explain why. (C) In words, define the income and substitution effects. Next, use the graph to identify the income and substitution effects. Which one is stronger?

If an individual has preferences (x_1,x₂)= x₂² +x₂², graph the indifference curve for U=20 and U=40