Microeconomics Answers

Explain why any firm maximizes profit or minimizes losses when the marginal cost is equal to marginal revenue?

Use a diagram to explain what would happen to the R/$ exchange rate, ceteris paribus, if the demand for dollars increases.

Do u agree that for a monopoly firm,price is equal to its marginal revenue. Explain why or why not.

given the demand function p=1000-Q express TR as a function of Q and hence sketch a graph of TR against Q. What values of Q maximizes total revenue, and what is the corresponding price?

The demand function for rose is 𝑄 = a-5p, and the supply function is 𝑄 = e + 2p + 0.1t, where a and e are positive constants and t is the average temperature in a month. show how the equilibrium quantity and price vary with temperature.

If the supply of corn is 𝑄n = b + 0.2p and the supply by the rest of the word is 𝑄r = e + 0.8p, what is the world supply.? What is the world inverse supply?

estimated demand function for processed pork is 𝑄 = 171 − 20𝑝 + 20𝑝𝑏 + 3𝑝𝑐 + 2Y. using the estimated demand function for processed pork, show how the quantity demanded at a given price changes as price of beef (Pb) decreases by N$0.95 a year.

Use two diagrams (draw the diagrams) that can be used to compare a

monopsony and a monopoly. Discuss and explain the diagrams that you

use. (10)

Problem 2. Amy has $20 a week to spend on coffee and coke. The price of coffee is $4 a cup, and the price of cake is $2 a slice.

1.     Calculate Amy’s real income in terms of cake, calculate the relative price of cake in terms of coffee.

2.     Calculate the equation for Amy’s budget line (with cups of coffee on the left side).

3.     If the price of cake doubles while the price of coffee remains at $4 a cup and Amy’s income remains at $20, describe the change in her budget line.

1.     Explain why, if Cindy equalized the marginal utility per hour of golf and tennis, she would not maximize her utility.

2.     Cindy’s tennis club raises its price of an hour of tennis to $10. The price of golf remains at $10 an hour and Cindy continues to spend $70 on tennis and golf. List the combination of hours spent playing golf and tennis that Cindy can now afford.

3.     Cindy loses her math tutoring job and the amount she has to spend on golf and tennis falls to $35 a month. How does Cindy’s demand for golf change? For Cindy, is golf a normal good or an inferior good? Is tennis a normal good or an infinite good?