Microeconomics Answers

PP Frontier slopes downward because production of one commodity (X) can be increased only by decreasing the production of second commodity (Y). Explain

Draw a PPC showing changes for each of the following for an economy producing both pizza and robots:

a. New robot making technology.

b. Decrease in the demand for pizza

c. Mad cow disease kills 85% of cows

Ravan Rusell borrowed Rs.10,000 to buy machinery for his small business. The total amount he repaid to his lender was Rs. 12,000. Identify the additional amount of Rs. 2000 Rusell paid his lender as which type of factor of payment in the circular flow model.

Show the following transaction in the circular flow diagram. Birbhum oil mill produces and sells 300 litres of oil at a price of Rs. 110/litre per day. Birbhum oil mill engages 4 persons in his factory with a wage of Rs. 500/-per day.

You have one scarce hour to spend between studying for an examination or taking classes in a tutorial for Rs. 200 per hour. You choose to study for examination. What is the opportunity cost of studying?

Suppose USA has a high average wage level and a high level of output per person, while China has a low average wage level and low level of output per person. Which Country can benefit from trade?

Andris has started his own business.

He has invested in his business - 40 000.

Bank interest rate 10%.

Revenue:

72 000.

Expenses:

rent 5 000,

labor 12 000

equip. 20 000.

Determine:economic profit and accounting profit

Will Andris continue to run his business?

You have one scarce hour to spend between studying for an examination  or taking classes in a tutorial for Rs. 200 per hour. You choose to study for  examination. What is the opportunity cost of studying?

When the price of a good x falls from £5 to £3, the demand for good y increases from 14 units to 18 units. Use the mid-point approach to calculate the cross price elasticity of demand and identify whether the goods are complements or substitutes. (4 marks)

You like the movie “Tumbbad” and want to visit the movie as many times 

as possible. The total satisfaction derived from watching movie is given in the

following table.

No of times 

watch the 

Movie

1st 2nd 3rd 4th 5th 6th

Total 

Satisfaction 400 700 950 1170 1270 1300

If the cost of watching movie each time is Rs. 220/-, then how many times 

you will watch theMovie?