Microeconomics Answers

Consider the following game of advice between the government and the Chief Economist. Let te T = [0, 1] be the state of the world drawn by Nature using the uniform distribution. The true value of t is revealed to the Chief Economist (CE) but not to the Government (G). The CE then sends a policy advice message m that can be any subset of the state space T. Upon receiving this message G takes implements a policy a ER. The payoffs of the two players are ug = 100 - (a - t)? and UCE = 200 - (a - (t+b))2 where b> is the CE's preference bias. (1) Define a messaging strategy in general for the CE. Use that definition to indicate when such a strategy is (a) fully informative and (b) babbling. (2) When do we say that the messaging strategy is interval partitioning? For a fixed b>0 derive and discuss the most informative equilibrium.

Assignment 01

Choose a recent article (published after January 2021) from any newspaper or online media with relevance to microeconomics. Write an essay analysing any single issue discussed in the article. Address the issue with the aid of a relevant theory or theories. Please attach a photocopy of the article as an appendix of your assignment. Answers without the article will not be assessed.

Maximum length excluding article: 3 A4 pages, 1.5 spacing, 12-pt Arial font (pages beyond the limit will not be marked).

Mark allocation:

a) Identification of article, summarising the article and identifying the main microeconomic issue discussed in the report/article. (10)

b) Discuss the relevant microeconomic theory which can enhance the understanding of the issue outlined in the article (report) and how business can apply such theories to improve the business performance. Use diagrams/graphs if necessary  (25)

Y=X+4X²-0.2X³ (Y=is wheat fields in kgs and X=amount of ferterlizer applied) Derive MPP and APP of the variable factor

1.     Suppose that the price of commodity Y is $1 per unit while the price of commodity X is $2 per unit and suppose that an individual’s money income is $16 per time period and is all spent on X and Y. (a) Draw the budget constraint line for this consumer and (b) explain the reason for the shape and the properties of the budget constraint line in part (a).

1.    What is the difference between real and fancied differentiation? Explain using practical examples.

can monopoly form perfect competition

The market demand for brand X has been estimated as

where Px is the price of brand X, I is per-capita income, Py is the price of brand Y, and Pz is the price of brand Z. Assume that Px = $2, I = $20,000, Py = $4, and Pz = $4.

a.      With respect to changes in per-capita income, what kind of good is brand X?

b.     How are brands X and Y related?

c.      How are brands X and Z related?

d.     How are brands Z and Y related?

e.      What is the market demand for brand X?

Qd=25000-2P

Qs=1000+1P

Calculate the equilibrium of price and quantity of a housing unit

What kind of price rationing strategy should be implemented by government to provide renters with houses at affordable price? Also mention the impact of this strategy on equilibrium quantity and equilibrium supplied of houses?

c) Consider John who consumes two goods, (X and Y), with prices 𝑃𝑥 = 𝑁$35, 𝑃𝑦 = 𝑁$25 and income I =N$1500 i) Construct budget constraint [3 marks] ii) Draw John’s budget line with good X on the horizontal axis. [3 marks] iii) Use a graph to show the effect of an increase in income from N$1500 to N$2000. [3 marks] iv) What will happen to the slope of the budget line if the price of good X decreases to N$18? [5 marks]