Microeconomics Answers

Find the Euclidean distance between

(i) (2, 5) and (4, 2)

(ii) (1, 3, 4) and (4, 2, -5)

Given the total cost function TC = 18q2

+ 4q + 16,200

(a) Find marginal cost (MC) and average coat (AC) as functions of q

(b) Show that when MC < AC, AC is falling, and when MC > AC, AC is rising

A firm in a perfectly competitive market has the following cost function:

C = 1/3q3 – 5q2

+ 30q +10

If the market-clearing price is 6, obtain the profit maximising level of output

suppose that france and germany both produce fish and olives frances opportunity cost of producing a crate of all us is 5 pounds of fish or germany the opportunity cost of producing a crate of olives is 10 pounds of fish study

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QUESTION 2: 

Scarcity of economic resources force us to choose, to choose is to lose. Discuss this statement providing at least three economic examples.

QUESTION 3: 

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

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?

How can time be incorporated into the theory of consumer behavior? explain the following comment: 'wants to make millions of dollars?Devise a product that saves americans lots of time

Explain why a perfectly competitive firm will not shut down in a short run when it is making losses. Illustrate your answer with an appropriate diagram.

Given two commodity system where both commodities are perishable and income Y is a exogenous D1= -2000+7Y-200P1+300P2

S1=-200+500P1-100P2

D2=-1000+4Y+200P1-100P2

S2=-800-100P1+300P2

And that for flow equilibrium , D1=S1 and D2=S2

a. find the reduced form

b. hence find the flow equilibrium values of the endogenous variables when consumers' income (Y) is $9.00

c. find the change in the flow equilibrium values that result from a unit change in Y .

In western Texas, in a small town called Shallowater, just nothwest of Lubbock, two stores sell tires, Store FlatsAreUs and Store We'reNotGood. Both have zero cost because they just cheat customers. Demand for tires in the town is Q = 550 - P, where P is price. Say that We'reNotGood produces Q = 110. If FlatsAreUs is trying to maximize revenue, then the store's optimal choice for Q would be _____ and they would then earn revenue _____.  

The Market System and The Circular Flow

Assume that a business firm finds that its profit is greatest when it produces $40 worth of product A. Suppose also that each of the three techniques shown in the following table will produce the desired output.

Resource

Price per unit ($)

Technique 1Units

Technique 2Units

Technique 3Units

Labor

3

5

2

3

Land

4

2

4

2

Capital

2

2

4

5

Entrepreneurial Ability

2

4

2

4

a) With the resource prices shown, which technique will the firm choose? Why? Will production using that technique entail profit or loss? What will be the amount of that profit or loss? Will the industry expand or contract? When will that expansion or contraction end?

b) Assume now that a new technique, technique 4, is developed. It combines 2 units of labor, 2 of land, 6 of capital, and 3 of entrepreneurial ability. In view of the resource prices in the table, will the firm adopt the new technique? Explain your answer.