Microeconomics Answers

In recent years, most towns and cities have seen a rapid growth in the number of coffee shops and sandwich bars, the majority of which are small and locally-owned. Evaluate, using an appropriate diagram(s), whether such small firms, operating in a monopolistically competitive market, can be economically efficient. [25. PARA 1 deination 2 to 3 points wit evluations and linked easioning and a substantial judgement

NHS figures show that a declining number of children are receiving all their routine vaccinations, including meningitis and the combined measles, mumps and rubella (MMR) vaccine. In some cases, vaccination rates of children are as low as 90%. Evaluate the significance of information failure in decisions made about the consumption of merit goods. [25]. IST PARA defination the two to three points with evaluation and a judgement

The total police budget in the UK for 2018/19 was £12.3bn, most of which was funded from taxation. This is an amount of money equivalent to £186 per person. Evaluate the effectiveness of state provision of public goods. [25) 1st para defination 2 points and 2 evaluation with a substantial judgement

Choose the best answer.

1.    If a firm sells its output on a market that is characterized by many sellers and buyers, a differentiated product, and unlimited long-run resource mobility, then the firm is

      a. a monopolist.       b. an oligopolist.     c. a perfect competitor.

      d. a monopolistic competitor.

2.    A natural monopolyrefers to a monopoly that is defended from direct competition by

 a. economies of scale over a broad range of output.   

 b. a government franchise.

 c. control over a vital input.

          d. a patent or copyright.

·       . The short run is the time period in which the level of output is fixed. True or False?

Give 3 examples each for:

·       Monopoly                           

·       Oligopoly

·       Perfect competition

·       Monopolistic competition

·       Public goods

·       Fix costs

·       Variable costs

A firm pays its accountant an annual fee of $10,000. Is this an economic cost?

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?

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

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)