Microeconomics Answers

 a) Explain the production efficiency in production possibilities frontier. 

3. The profit function of a firm to produce two goods is given as T = 24Q1Q - Q, 0, - 203 +33Q, - 43 %3D Find the level of output required to maximize profit. Use the second degree differentiation to determine the maximum stagnation point.

What is opportunity cost

1. Discuss the factors that determine the income elasticity of demand.

2. Explain the conditions for oligopoly market structure to exist.

3. What is increasing returns to scale? and describe at least three causes of

increasing returns to scale?

4. What is the relation between productivity and cost? Describe the association

using equations for MC & MP, and AP & AC

5. Do monopoly firms get a normal profit or supernormal profit in the short run?

Explain how?

Discuss the impact the hard lockdown had on perfect market

Given the demand for a product as Qd = 100 - 5P and the supply is given as Qs = -20 + 3p. You are told equilibrium is obtained at the point where Qd = Qs. The equilibrium quantity for the product is

difference between monopoly and perfect competion for 10 marks

You are planning to start a business. When calculating the costs. You have considered the costs of setting up your manufacturing plant, production, logistics, and all other costs except for the opportunity cost of your initial investment in this business. Which of the below is true?

A) You calculated the economic cost.

B) You calculated the explict costs.

C) You calculated only the variable costs.

D) You calculated only the fixed costs.

Analyse constraints faced by new firms in the economy

Mustansir is the owner of small pottery firm. He has hired one helper at Rs. 15,500/= per month,

pays annual rent of 144,000/=, spends around 19,000/= on materials. He has 400,000/= of his own

funds invested in equipment like pottery wheels, kilns and so forth that could lead him to earn

50,000 per year if alternatively, invested. He was also offered by his competitor to work as a potter

and earn 60,000/= per month. He estimated his entrepreneurial skills worth Rs. 53,000 per year.

Although total annual revenue from the pottery sales is 9,650,000. Calculate the accounting and

economic profit of Mustansir’s pottery firm and comment on the situation that whether he should

continue doing the business or shut down.