Microeconomics Answers

Describe the main characteristics of the South African economy

Denek Box company produces card boxes In bundles of 1,000 boxes. The market Is highly competitive, with boxes currently selling for $100 per thousand. Denek's total and marginal cost curves are:

TC = 3,000,000 + 0.001Q2

2

MC = 0.002Q

Q Is measured In thousand box bundles per year.

a. Calculate Denek's profit maximizing quantity.

b. Is the firm earning a profit/loss?

c. Analyze Denek's position in terms of the shutdown condition.

How does direct taxes impact on the amount a person saves or spend

Suppose that the Market for Cigarette is facing the Demand function Q = 20 – 2P and Supply function Q = 10.5 + 0.5P: a) What is the effect on the Equilibrium Price and Quantity when Government imposes a 7% of tax as percent of equilibrium price on each unit of Cigarette produced? [5 marks] b) What is the price elasticity of demand at equilibrium after tax and comment on the answer? [5 marks]

Suppose that the Market for Cigarette is facing the Demand function Q = 20 – 2P and Supply function Q = 10.5 + 0.5P: a) What is the effect on the Equilibrium Price and Quantity when Government imposes a 7% of tax as percent of equilibrium price on each unit of Cigarette produced? [5 marks] b) What is the price elasticity of demand at equilibrium after tax and comment on the answer? [5 marks]

Use the diagram to explain how a black market can develop when the government intervenes in the price mechanism by fixing prices

Develop and explain the traditional circular flow diagram and illustrate the interdependence between the sectors

Consider a competitive firm with the following profit function

P = R - C = PQ - WL - rK; where P = Price of the output Q = Output L =

Labor input K = Capital input w = wage rate for labor input r = rental rate for

1 1

capital input and Q(K,L) = 16K713

Find the input quantities K and L that satisfy the first order conditions for the profit maximization. Assume the parameter values are P = 4, w = 1, and r= 1. (b)

Compute the profit maximizing output Q.

Compute the maximum profit P.

If the wage rate w changes to w = 2, determine the new L.

(e) If the rental rate r changes to r = 2, determine the new L.

(f) If the output price P changes to P = 16, determine the new L.

Which optimal values can be calculated from following equation? How many techniques are used to solve these equations? Give answers after solution.Q =XY.......s.t...... M=PxX+PyY

How can the impact of an increase in the price of petrol on the demand curve for petrol be illustrated?

The demand curve for petrol will shift to the left.

The demand curve for petrol will shift to the right.

The demand curve for petrol will remain unchanged.

The demand curve will become more elastic