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A firm operates in a perfectly competitive market. The market price of its product is 4
birr and the total cost function is given by TC=1/3Q^3-5Q^2+20Q+50
, where TC is the
total cost and Q is the level of output.
a) What level of output should the firm produce to maximize its profit?
b) Determine the level of profit at equilibrium.
c) What minimum price is required by the firm to stay in the market?
Opportunity cost is best defined as?
As more and more units of a good are consumed by a household, the total utility gained from the good will
A country’s production possibility curve would shift inwards
Gift cards are a popular holiday gift, with between $40 and $45 billion being spent on gift cards annually.
a) Suppose a consumer is indifferent between receiving a $100 gift card for Best Buy and $100 in cash. Is the optimal bundle an interior solution or a corner solution?
b) If a consumer is indifferent between a $100 gift card and $50 cash, where on their budget curve does their indifference curve lie? Show on a graph
Demand
In what sense is taxing food a “good” way to raise revenue?
Q: 03: Suppose that when everyone wakes up tomorrow, they discover that the government has given them an additional amount of money equal to the amount they already had. Explain what effect this doubling of the money supply will likely have on the following:
a. the total amount spent on goods and services
b. the quantity of goods and services purchased if prices are sticky
c. the prices of goods and services if prices can adjust
. Suppose that you and your roommate have started a Bread delivery service on campus.
a. List some of your fixed costs and describe why they are fixed. (5 Marks)
b. List some of your variable costs and describe why they are variable.
The dean of a college faces the following costs: graders, faculty, classroom space, and chalk. Of these costs, which are likely to be variable in the long run
