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If wages fall, then:
A. According to the income effect, the worker’s demand for leisure will increase.
B. According to the substitution effect, the worker’s demand for leisure will decrease.
C. According to the substitution effect, the workers will substitute leisure time for
working.
D. The income and substitution effects will work in the same direction.
E. The opportunity cost of not working increases.
The price elasticity for rice is estimated to be -0.4 and the income elasticity is 0.8. At a price of $0.40 per pound and a per capita income of $20,000, the demand for rice is 50 million tons per year.
a) if the price of rice increases to $0.41 per pound and income per capita remains at $20,000, what will be the quantity demanded?
1. Do you know the assumptions which underlay the consumer’s preferences? Explain them.
Given the following information on price of Maize flour (MF) 10$, the price of Rice (R) as 15$ and income of consumer 150$ when the consumer needs to maximize his utility function
Analyze the following graph on consumer behavior, through
Explaining the line/curve A and C
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.
You are thinking about setting up a lemonade
stand. The stand itself costs $200. The ingredients
for each cup of lemonade cost $0.50.
a. What is your fixed cost of doing business?
What is your variable cost per cup?
b. Construct a table showing your total cost,
average total cost, and marginal cost for output
levels varying from 0 to 10 gallons. (Hint:
There are 16 cups in a gallon.) Draw the three
cost curves.
University authority has assigned you to build a model to analyze the total number of books that the
students of university want to buy from the university Bookshop. Discuss how vou are going to build a model in this
case. Discuss how we can use and apply the model you have just built.
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.
