Microeconomics Answers

Hira has Rs.1200 a week to spend on yogurt and mangoes. The price of yogurt is Rs.200, and mangoes are Rs.400 a box. (Hint: Quantity of mangoes to be plotted on the x-axis of the budget line)

1. Calculate the Y-intercept for the budget line. 
2. Calculate the X-intercept for the budget line. 
3. Calculate the slope of the budget line. 

QUESTION 5

MonoMed, having a Patent on production of a medicine, has following Demand and Cost Schedule :

Price (Rs ) 12 11 10 9 8 7 6 5 4 3

Quantity 0 1 2 3 4 5 6 7 8 9

TVC ( Rs ) 0 13 16 20 25 31 38 46 56 68

Where Fixed Cost is Rs 5

e. How would you define the market structure of MonoMed? What are the characteristics? Does the firm have pricing power? (1 Mark)

Actual GDP in 2017 was UAH 3,000 billion, while potentially possible was UAH 3,375 billion. The natural unemployment rate for the country is 4%. Find the actual unemployment rate.

Assume the balance of aggregate demand and aggregate supply was broken by the changes in income of economic entities. How the balance may be restored? Demonstrate this with the aggregate demand and aggregate supply curves. Why the growth of aggregate demand may not lead to inflation?

Qno:01

In Pakistan internet service is ought to be considered as the perfectly competitive industry. Following is the information available for the internet service provider A operating in the market. 

Total output

Total Cost

180

10

280

20

400

30

530

40

670

50

820

60

980

70

1150

a. Briefly discuss the characteristics of the market Service Provider A is operating.​2 Marks

b. If the market price of the fruit is 16​​​​​​6 Marks

i. Find how much output will the firm produce (Show calculations).​2 Marks

ii. Illustrate it graphically​​​​​​​2 Marks

iii. Find if the firm is maximizing profit or minimizing loss (show calculations) and highlight the same in the graph drawn in part ii. ​​​​​1 Mark

iv. From your answer in part iii, explain if the firm is operating in the LR or SR. 1 Mark

suppose a monopolist sells to two groups that have constant elasticity demand curve with elasticity e1 and e2. the marginal cost of production is constant at C. What price is charged to each group?

MLC= 3+4L

calculate the cost of employing the first eight labourers ?

please show workings

Use a graph to illustrate and explain the concept of consumer equilibrium for a consumer ,Johannes ,who consumers only two goods :Biltong(vertical axis)and beer (horizontal axis)

Suppose the following demand and supply function:

Q^d = 750 – 25P

Q^s = -300 + 20 P

       i.           Find equilibrium price and quantity

     ii.           Find consumer and producer surplus

If a consumers objective function is given by U=X₁^aX₂^b subject to P₁X₁ + P₂X₂ = m. Establish the levels of X₁ and X₂ that maximizes the consumers satisfaction.