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What is a production function? How does a long-run production function differ from a short-run production function?
The information about the costs of a firm is given below.
Output(Q)
AFC, $
AVC, $
1
50.00
100.00
2
25.00
80.00
3
16.67
66.67
4
12.50
65.00
5
10.00
68.00
Answer the following questions:
a. What is the firm's fixed cost?(Hint: Use FC = AFC x Q)
b. If the firm produces three units, what is the average total cost?(Hint: Use ATC = AFC + AVC)
c. What is the total cost of producing 4 units? (Hint: Use TC = ATC x Q = (AFC+AVC) x Q.)
d. If the firm closes down and produces no output, what will be its total cost?
Wet coals have also been identified as one of the issues causing load shedding in the
country. Eskom have not been happy with the current supplier for some time. Discuss how
should Eskom go about a negotiation process with a prospective new supplier. (30)
Suppose that a decrease in the price of X results in less of good Y sold. This would mean that X and Y
are
A. complementary goods
B. substitute goods
C. unrelated goods
D. normal goods
“It is possible that the price could rise to challenge 2011 levels and move to north of the USD$4000 per ton level."
Cocoa suppliers in Solomon Islands have all but conceded that price levels in 2011, when the price hit USD$3826 per ton, is no longer
possible.
“Those were good times, price was high, so there was a steady local supply of the beans, it was a good time to be in the cocoa
business,” said Harold, a local cocoa supplier who has since left the business.
(i) Explain the linkages between the article and the relevant microeconomic theory. Explain the content of the article to show your
recognition and understanding of the relevant economic concepts, and how its application to the real world.
(ii) With reference to the article, explain the reason for the predicted price of cocoa. Use relevant demand/supply graph to
support your answer.
. Draw a graph that shows inefficient, efficient, and unattainable point on a production possibilities frontier. Explain the production efficiency in production possibilities frontier
2. Let Qd stand for the quantity demanded, Qs stand for the quantity supplied, and P stand for price. If Qd = 20 - 2P and Qs = 5 + 3P, then the equilibrium price is
Assume the quantity demanded for a particular commodity is given by the formula (Q)= 8000P^(-1.5). Compute the elasticity of demand
examples of scarcity that you face. (microeconomic)
Why was agricultural sector declared as a critical industry and exempt from the hardest lockdown regulations
