Microeconomics Answers

Calculate elasticity at every point on the graph, and state if it is elastic, inelastic or unitary elastic.

The demand function for rose is Q= a - 5p and the supply function is Q= e + 2p + 0.1t, where a and e are positive constants and t is the average temperature in a month. Show how the equilibrium quantity and price vary with temperature?

Estimated demand function for processed pork is Q=171-20p+20pb+3pc+2y. Using the estimated demand function for processed pork, show how the quantity demanded at a given price changes as price of Beef (pb), decreases by $ 0.95 a year?

If the supply corn is Qn=b+0.2p and the supply by the rest of the world is Qr=e+0.8p, what is the world supply? What is the world inverse supply?

In economic theory, a clear distinction is made between a movement along the demand curve and a movement of the demand curve. In light of the statement, provide the correct graph to illustrate and explain an increase in the price of the product

Uber has a monopoly on ride-sharing services. In one town, the demand curve on weekdays is given by the following equation: P = 50 - Q. However, during weekend nights, or peak hours, the demand for rides increases dramatically and the new demand curve is P = 100 - Q. Assume that marginal cost is zero.

a. Determine the profit-maximizing price during weekdays and during peak hours.

b. Determine the profit-maximizing price during weekdays and during peak hours if MC = 10 instead of zero.

c. Draw a graph showing the demand, marginal revenue, and marginal cost curves during peak hours from part (b), indicating the profit-maximizing price and quantity. Determine Uber’s profit and the deadweight loss during peak hours, and show them on the graph.

Using a circular flow diagram, illustrate the flow of income and spending for a model including the foreign sector. Clearly describe and indicate leakages the direction of the flies.

4. Solve the following system of equations.

50𝑥+20𝑦=1800 10𝑥+3𝑦=300

3. The production function of a firm is described by the following equation 𝑸=𝟏𝟎,𝟎𝟎𝟎𝑳−𝟑𝑳 𝟐 where L stands for the units of labor.

a) Draw a graph for this equation. Use the quantity produced in the y-axis and the units of labor in the x-axis.

b) What is the maximum production level?

c) How many units of labor are needed at that point?

2. Considering the previous supply line, determine if the following demand function corresponds to the market demand equilibrium stated above. 𝑸𝑫=𝟑𝟎𝟎𝟎−𝟐𝒑.