Microeconomics Answers

Given quantity demanded t

And supplied as q=36-1/3p and q=- 9+1/2p. If the government decide to impose a tax of 't" per unit supplied determine the value of tax

Suppose Americans decide to save more of their incomes. If banks lend this extra saving to businesses, which use the funds to build new factories, how might this lead to faster growth in productivity? Who do you suppose benefits from the higher productivity? Is society getting a free lunch?

Due to substintial increase in price in country A ,the real income level of population in country A decrease.show a diagram shows how the decrease in the income level in country A will affect the demand for meat which is a normal good

Much of the demand for U.S. agricultural output has come from other countrie. in 1998 the total demand for wheat was Q=3244-283P. Of this total domestic was QD=1700-107P and domestic supply was QS=1944-207P. Suppose the export demand for wheat falls by 40 percent.
a. U.S. farmers are concerned about this drop in export demand. What happens to the free-market price of wheat in the United States? Do farmers have much reason to worry?

Discuss each of the following statements from the standpoints of equity and efficiency.

“Everyone in society should be guaranteed the best health care possible.”

“When workers are laid off, they should be able to collect unemployment benefits until they find a new job.”

1. A basic assumption about consumers in microeconomics is that they have preferences over different baskets of goods. Explain the concepts “preference”, “preference order”, and “basket of goods”.

1. What is the marginal rate of substitution, MRS? State the definition and explain, in words, what it means

2.MRS will have an influence on the shape of an indifference curve. What influence?

The national poultry producers published the following estimates of demand and supply relationships for plucked chicken:

QD = 60.000 – 10.000P

QS = 20.000P

a) Calculate the perfect competition equilibrium price and quantity that will result in the market for plucked chicken (6marks)

b) If the poultry industry was organized as a cartel, calculate the price and quantity that would maximize profits for cartel members.

(Hint: The Total Revenue function for the cartel would be: TR= 6Q – 0.0001Q2, and the Supply function could also be expressed as follows: P= 0.00005Q) (4.5marks)

c) Comparing your answers in parts a) and b), what is the effect on price and output in this market when the cartel is allowed to operate? What is the effect on consumer surplus (do not calculate, only describe/explain)? (4.5 marks)

Which of the following statements are correct?

a. The difference between government spending and borrowing is called the budget deficit.

b. If government finances part of its spending from borrowing from the central bank, this is called inflationary financing.

c. Expansionary fiscal policy implies that taxes must increase, and government spending must be limited.

Suppose a Monopolist faces the following Total Cost and Demand functions:

TC = 100 +2Q

P = 25 - 0.25 What is the firm’s profit-maximizing position?