Microeconomics Answers

Demand and supply:

a. Do not really exist.

b. Exist only during certain times of the year.

c. Is a model to analyze prices only.

d. Is a model to analyze quantities only.

e. Is a model to analyze prices and quantities.

Calculate the equlibrium quantity and price if the quantity supplied can be represented by equation Qs=18000 +0. 2P and quantity demanded can be represented by the Equation Qd=2400-0.1P

Using appropriate diagrams compare and contrast short-run equilibrium conditions with the

long-run equilibrium condition faced by a firm under monopolistic competition.

Biryani and borhani are complements. Both have inclastic demand, A strike in dairy farming industry causes a decline in the production of yogurts. Use appropriately labeled diagrams to answer the following questions. (All diagrams must be explained properly)

a. How will this affect the price of yogurt?

b. What will happen to the price of a bottle of borhani? How will the expenditure on borhani change?

c. What happens to the price of biriyani? What happens to total expenditure on biriyani?

Rice is a basic necessity good in Bangladesh. Using diagram explain if the government places a Tk.60 tax on consumers of rice, will the price paid by consumers rise by more than Tk.60. less than Tk.60, or exactly Tk.60?

Biryani and borhani are complements. Both have inclastic demand, A strike in dairy farming industry causes a decline in the production of yogurts. Use appropriately labeled diagrams to answer the following questions. (All diagrams must be explained properly)

a. How will this affect the price of yogurt?

b. What will happen to the price of a bottle of borhani? How will the expenditure on borhani change?

c. What happens to the price of biriyani? What happens to total expenditure on biriyani?

2. Using the diagram below calculate the change in revenue from equilibrium if price ceiling is set at $8.

Price $20

18

10

14

12

10

8

6

4

2

10 20 30 40 50 60 70 80 90 100 Quantity

3. Rice is a basic necessity good in Bangladesh. Using diagram explain if the government places a Tk.60 tax on consumers of rice, will the price paid by consumers rise by more than Tk.60. less than Tk.60, or exactly Tk.60?

The Star One Bus service is considering raising price of its tickets from current fare of

Rupees 300 per seat.

The Demand schedule for it’s regular route is:

Price (Rupees per ticket)

Quantity Demanded (tickets per month)

200

900

300

750

400

600

500

450

600

300

3a. Calculate the price elasticity of demand if Star One raises the fare from Rs.300 to Rs.400. Is the demand price elastic or inelastic for this fare rise? 

list 2 possible sources of supply for dollars in south africa

The price of gasoline has increased during the past year explain why the law of demand applies to gasoline just as it does to all other goods and services?

Discuss Consumer education and show Why Consumer Education and Economics 

Important? 

a.    Government price controls can short-circuit the market’s information transmission function. Discuss using appropriate figures.

b.    Using appropriate figures and charts, explain why earning zero economic profit is different from earning zero accounting profit. What are the implications of these profits to a perfectly competitive firm?