Microeconomics Answers

"As the price of domestic automobiles has inched upward, customers have found foreign autos to

be a better bargain. Consequently, domestic auto sales have been decreasing, and foreign auto sales

have been increasing." Using only the information in this quotation and assuming everything else

constant, which of the following best describes this statement?

(A) A shift in the demand curves for both domestic and foreign automobiles

(B) A movement along the demand curves for both foreign and domestic automobiles

(C) A movement along the demand curve for domestic autos, and a shift in the demand curve for

toreign autos

(D) A shift in the demand curve for domestic autos, and a movement along the demand curve for

foreign autos

Explain why we say that not all giffen goods are inferior but not all inferior goods are inferior goods

2.3 Differentiate between product market and labour market (Use diagrams that explain the interactions in the markets). [04] 

2.2 Market structures are referred as the competitive environment in which the buyers and sellers of the product operate. A market consists of all the actual and potential buyers and sellers of a particular product. Discuss thoroughly oligopolistic and perfect competitive market structure and give examples of each form of the market structure.

Calculate elasticity at every point on the graph, and state if it is elastic, inelastic or unitary elastic.

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?

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 $ 0.95 a year?

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

In economic theory, a clear distinction is made between a movement along the demand curve and a movement of the demand curve. In light of the statement, provide the correct graph to illustrate and explain an increase in the price of the product

Uber has a monopoly on ride-sharing services. In one town, the demand curve on weekdays is given by the following equation: P = 50 - Q. However, during weekend nights, or peak hours, the demand for rides increases dramatically and the new demand curve is P = 100 - Q. Assume that marginal cost is zero.

a. Determine the profit-maximizing price during weekdays and during peak hours.

b. Determine the profit-maximizing price during weekdays and during peak hours if MC = 10 instead of zero.

c. Draw a graph showing the demand, marginal revenue, and marginal cost curves during peak hours from part (b), indicating the profit-maximizing price and quantity. Determine Uber’s profit and the deadweight loss during peak hours, and show them on the graph.