Microeconomics Answers

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?

Average price of a CD reduces from $21 to $15. Company expected the quantity will increase 30%.

a. calculate the price elasticity of demand over the price range. 

1. Clarify the relationship between "production and cost", based on your knowledge.

2. Explain all these, write only what you understand:

a) Importance of Distribution,

b) Concept of national income,

c) Theory of employment or

d) Concepts of supply and demand.

3. What do you understand about national income?

4.How would you like to summarize about approaches for the monetary analysis?

What is the relationship between the term cash cost and the cash flow concept?

Differentiate between monopoly, oligopoly, and perfect competition. For which situation are most general economic principles stated? Is a monopoly ever desirable for the economic welfare of the public?

Qdx=100-10Px, Find the commodity of X demanded, if Px=7

Interpret the utility function: U(x1 , x2,...,xn )= β1x1 + β2x2 + ··· + βnxn ; Similarly, One study reports a utility function that had the form : U(TW,TT,C)= −0.147TW − 0.0411TT − 2.24C, where TW = total walking time to and from bus or car; TT = total time of trip in minutes, C = total cost of trip in dollars; rigorously interpret the meaning of that utility function. 

Name a complement, and a substitute, for each of the following products.

• Takeaway coffee
• Weekend Break in a hotel in Waterford City.

In the case of one of the above describe what happens to the demand for that product when a) the price of the complement that you have named falls, b) the price of the substitute you have named falls. In each case illustrate what happens on a graph of the demand curve for the product. 

Joan, a new student at WIT has just decided to join the college rugby club. He plans to train 2 nights per week over the 13 weeks of the semester. She knows that by doing so she will have to forfeit working for 2 five hour shifts each week in a local pizza parlour (his next best alternative activity) for which she would have earned €10 per hour. There are other non- financial benefits that she is aware of that would accrue from working in the pizza parlour also. Additionally, training gear for the semester will cost her €170.

Outline the opportunity cost of Joan’s decision to join the college rugby team for the semester – that is the implicit cost plus the explicit cost of her decision. Remember to include both financial costs and non-financial costs in your answer 

Suppose there are two profit-maximizing firms 1 and 2 producing q1 and q2 units respectively of a homogeneous good. The marginal cost of production for both the firms are c. The inverse demand function for this good is p = 1 – Q, where p is the price and Q = q1 + q2 is the total output produced by these firms. Suppose the firms choose their outputs sequentially with firm 1 moving first and firm to following it (after observing firm 1’s choice). In equilibrium, outputs chosen by the firms are

a) (q1, q2) = ((1-c)/3, (1-c)/3)

b) (q1, q2) = ((1-c)/2, (1-c)/4)

c) (q1, q2) = ((1-2c)/2, (1-c)/4)

d) None of the above