Microeconomics Answers

According to economists, If the price of energy (oll and gas, increases, then the price or certain goods anc

services can also increase. Use the Model of Demand and Supply (diagram) to explain why this might be

the case. You can discuss using the example or any product

The population in country C decreases, due to a lower birth rate. At the same time, there is an increase in the cost of fertilizer, which is used to grow vegetables. Explain how the market for vegetables will be affected by these changes. Clearly indicate how the equilibrium price and equilibrium quantity will be affected by these changes. Make use of a combination of diagrams and verbal explanation to explain your answer. Note that your diagrams should be properly annotated and that marks will be deducted for any missing labels on your diagram.

firm has the production function: TC=120-0.1Q^2 , and sells its output in two separate markets with demand functions: Q1=800-2p1

Q2=750-2.5p2

;

(i) Find the profit-maximizing output and sales in each market [8 marks]

(ii) Use the Hessian matrix to check if the second-order conditions for a maximum a

) A firm has the production function: , and sells its output in two separate markets with demand functions:

;

(i) Find the profit-maximizing output and sales in each market [8 marks]

(ii) Use the Hessian matrix to check if the second-order conditions for a maximum are met.

1. Apple Corporation requires its top managers to own shares of stock in Apple equal in value to three times their annual salary. Explain what problem Apple is trying to solve with this requirement, and explain whether this requirement does indeed solve the problem.

Give an example of any factor that influences the size of multiplier

Compare the perfectly competitive firm and monopolist as to how it makes the following decisions. Hint: use either equations or graphs to illustrate your answer

I. How much to produce

Ii. What to produce

III. Whether or not to shut down in the short run

Iv. What happens in the long run if losses persist

With the aid of a diagram, explain why all giffen goods are inferior but not all inferior goods are given.

 a. Why would a firm that incurs losses choose to produce rather than shut down?

b. The supply curve for a firm in the short run is the short-run marginal cost curve (above the point of minimum average variable cost). Why is the supply curve in the long run not the long-run marginal cost curve (above the point of minimum average total cost)?

c. In long-run equilibrium, all firms in the industry earn zero economic profit. Why is this true?

Given the following demand equation P = 60- 2Q and the cost equation TC(q) = 100+3Q2

For the market of shoes

a. If the enterprises in this market take advantages of perfectly competitive market, find the equilibrium outputs and price.

b. If the seller in this market takes the advantages of pure monopoly, find the equilibrium outputs and price.

c. If the seller in this market takes the advantages of oligopolistic market, find the equilibrium outputs and price.