Microeconomics Answers

1.              If Qs = -20 + 10p, and Qd = 400 - 20p, what is the equilibrium price and quantity? (2 marks)

What is the relation between productivity and cost? Describe the association using equations for MC & MP, and AP & AC

- A brief explanation of the public wage bill in SA (Its advisable to illustrate trends by means of graphs and tables showing: -

- Why is it a problem in SA

Brief explanation on the background of public sector wage bill in south Africa

Production at Point A - 0 Tubas & 25 dishwashers 

Production at Point B - 30 Tubas & 20 dishwashers 

Production at Point C - 50 Tubas & 10 dishwashers 

Production at Point D - 60 Tubas & 0 dishwashers 

Production at Point E - 40 Tubas & 20 dishwashers 

Production at Point F - 30 Tubas & 10 dishwashers 

Using the production possibilities frontier above:

a) Calculate the opportunity cost of point A move to point B.  

b) Calculate the opportunity cost of point C move to point D.                        

Production at Point A - 0 Tubas & 25 dishwashers 

Production at Point B - 30 Tubas & 20 dishwashers 

Production at Point C - 50 Tubas & 10 dishwashers 

Production at Point D - 60 Tubas & 0 dishwashers 

Production at Point E - 40 Tubas & 20 dishwashers 

Production at Point F - 30 Tubas & 10 dishwashers 

Using the production possibilities frontier above:

Draw a new graph and explain what would happen to the production possibilities frontier if there were a technological breakthrough in producing tubas. 

 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?