Search & Filtering
Given Utility function U=20Q-2Q^2what quantity of good gives highest utility for the consumer? What will happened if the consumer obtains more quantity than the one you computed?
In the demand function Q=P^-0.4 , calculate price elasticity of demand and identify type of good
Suppose you are the producer of cabbages,onions and potatoes and you are in a position to decide at which price you'll offer these products for sale. What will be your pricing strategy for each of these products in order to increase the total revenue?In your analysis you found that the price elasticity of demand for cabbage is 0.6,for potatoes is 1.0 and for onions it is 1.4.Explain your decision in each case.
Terry’s utility function over leisure (L) and other goods (Y ) is U(L, Y ) = Y + LY. The associated marginal utilities are MUY = 1 + L and MUL = Y. He purchases other goods at a price of $1, out of the income he earns from working. Show that, no matter what Terry’s wage rate, the optimal number of hours of leisure that he consumes is always the same.What is the number of hours he would like to have for leisure?
Explain theoretically and diagramatically, how the market equilibrium will change:
a) simultaneous increase in demand and decrease in supply where both changes are almost equi- proportionate
b) simultaneous decrease in demand and increase in supply and decrease in demand is relatively more than increase in supply
With a 10% increase in the price of a dairy products, the number of units supply rises from
20 to 25. Determine the price elasticity of supply. State whether the supply for the product
is elastic or inelastic.
A local pharmacy manager decides to raise the price of a 50-pill prescription of
amoxicillin (an antibiotic) from Rs. 1000 to Rs. 1200. The pharmacy tracks the sales
of amoxicillin over the next month and finds that sales decline from 2,000 to 1,980
boxes. Is the demand elastic or Inelastic?
A Restaurant manager decides to lower the price of a featured sandwich from Rs. 500
to Rs. 400, and she finds that sales during the week increase from 440 to 680
sandwiches. Is demand elastic or Inelastic?
Show in a diagram the effect on the demand curve, the supply curve, the equilibrium price and the
equilibrium quantity of each of the following events.
1. Tribune’s market in your city
a. Rise in wages of reporters.
b. Tribune published a ground breaking story happened in your city.
2. The market for Borjan shoes.
a. Aisam-ul-Haq won the New York open and is the ambassador of Borjan.
b. Raw leather price rises.
3. The market for donuts
a. Realization about donuts causing obesity.
b. Less time for working class to make breakfast.
4. The market for the Wren and Martin workbook
a. Teacher making it mandatory for every student to practice.
b. Paperback editions making printing costs cheaper for books.
Explain how microeconomics differs from macroeconomics. Which of the following headlines, taken from the various issues of The Daily Graphic, deal with microeconomics:
a. “Nestle Ghana posted a 18% increase in sales”
b. “GRIDCO plans to slash more jobs”
c. “Ghana’s Output Grew by 5.8%”
d. “Housing starts soared 10% in September”
e. “Ghana to Breach key Deficit Target it helped to create”
Explain each issue why it is a microeconomic issue
