Microeconomics Answers

1. Use a graph to illustrate and explain the concept of consumer equilibrium for a consumer,johannes, who consumes only two goods:biltong(vertical axis) and beer(horizontal axis)
2. Now indicate on your graph and explain the effect of a decrease in the price of biltong on consumer equilibrium.

1. Draw a graph to illustrate and explain the effect of the implementation of a price ceiling below the equilibrium price in the market.

1. Explain the difference between substitutes and complements in terms of cross elasticity of demand. use examples to illustrate your answer.
2. A baker calculates the income elasticity of bread as 0.25, interpret the elasticity co-efficient and explain what can be deducted about bread based on this value.

In the market for sugar, there is an increase in the number of households in the market, at the same time there is an increase in the price of molasses(a substitute for sugar), use a graph to illustrate and explain the impact of these changes on the equilibrium price and equilibrium quantity of sugar.

a) Show graphically and explain what is meant by consumer equilibrium.

b) Provide a clear argument explaining why under a monopoly MR (y) < AR((y) for y >0, 

assuming the same price must be charged.

c) The Namibian Competition Commission is entrusted as the principal institution to 

promote and safeguard fair competition in Namibia by promoting the efficiency, 

adaptability, and development of the Namibian economy. With a help of a diagram 

clearly distinguish the welfare effects of a monopoly and a competitive firm. 

If the required reserve ratio is 10 percent, currency in circulation is $1,200 billion, checkable deposits are $1,600 billion, and excess reserves total $2,500 billion, Then the money supply is [HINT: As a decimal 0.12345 or percent 12.345%]

Your task is to evaluate the impact of a new policy or a policy change on the British society from the welfare economics perspective in an essay. You can choose a policy to evaluate yourself. It needs to be a policy that has not been implemented yet. Alternatively, you can evaluate the impact of the UK re-joining the EU.

1. Evaluate the status quo versus the new policy according to the weak and strong Pareto criteria

Given a firms demand function Q-90+2P=0 and it's average cost function AC=Q²-8Q+57+2/Q. Find the level of output which maximises marginal cost.

In the context of Pakistan’s society for each of the following products, indicate the correct type of price elasticity of demand or supply and also justify your answer:

.  An expensive necklace to be sold at an auction.

. Demand for COVID-19 Vaccine.

Given a firms demand function Q-90+2P=0 and it's average cost function AC=Q²-8Q+57+2/Q. Find the level of output which maximises marginal cost.