Microeconomics Answers

With the aid of graphs illustrate the effect of a change in demand for chicken by restaurant to a chicken farmer

When the price of a particular flavor of Pizza is tk. 400, buyer want to purchase 8000 units per year, but when the price falls to tk. 260 the quantity demanded rises to 10000 Pizza’s per year. Calculate the price elasticity of demand for Pizza and make comments your result. 

Evaluate the effectiveness of Tax as a Government Intervention Measure to combat Market Failure

With an aid of a graph explain the Relationship between Consumer price and quantity if maximum prices are set below the Market price

1.     Assume the following for price discriminating monopolist aimed at maximizing profit. Total demand for the product of the monopolist is Q = 50-5P (P = 100-2Q) (10 Marks)

·        Demand in Market one is Q1= 32-0.4P1(P1= 80-2.5Q1)

·        Demand in Market two is Q2= 18-0.1P2(P2= 180-10Q2)

·        Cost function is C = 50+40Q (where Q = Q1+ Q2)

The the consumer-facing the budget line P1x1+p2x2=M where p1 and p2 price is given as good 1 and 2 and x1 and x2 are quantity demanded for good 1 and 2 respectively,M is consumer income ,if the price of good 1 doubles ,the price of good 2 becomes 5 times larger and incomes becomes 3 times larger , write down an equation for the new budget line in terms of the original prices and income

Suppose that there are 20 people are interested in buying good x who had a reservation price of 100 shillings and the 15th person had a reservation price of 50 shillings what will the demand curve look like

With the help of a well labeled diagram explain the three stages of productions. Why should a firm not operate in the first and third stages?

Cindy’s tennis club raises its price of an hour of tennis from $5 to $10, other things remaining 

the same.

6- List the combinations of hours spent playing golf and tennis that Cindy can now afford 

and her marginal utility per dollar from golf and from tennis.

7- How many hours does Cindy now spend playing golf and how many hours does she 

spend playing tennis?

8- Use the information in Problem 6 to draw Cindy’s demand curve for tennis. Over the 

price range of $5 to $10 an hour of tennis, is Cindy’s demand for tennis elastic or 

inelastic?

9- Explain how Cindy’s demand for golf changed when the price of an hour of tennis 

increased from $5 to $10 in problem 6

TR=36.28q-2.50q^2  TC=40+60q-8q^2

find

a)profit function

b)q^*,p^*TC^*,AR^*,AC^*

c)nature of product

d) nature of market e)nature of return