Microeconomics Answers

1. Health care cost is expected to increase in Malaysia. Let X represent

(f\JJ the quantity of medical cost, Y represent the quantity of other goods and income (M) be measured in hundreds of Ringgit Malaysia. The price of medical services and other goods in terms of dollars per minute, with

M = 600, Px = 8, and Py = 10.

(a) Illustrate the budget set, and determine the market rate of substitution.

(b) Show in your graph what happens to the budget constraint if Px decreases to RS.6.

(c) What is the meaning of the slope of the two budget constraints?

Mr. Z consumes hot drinks and blue trouser. At prices of Rs. 2 for a pair of hot drinks and Rs. 2 for blue trouser, his marginal utility of consuming another unit of blue trouser is 4, and his marginal utility of another pair of hot drinks is 2. (hint: graph hot drinks on the y-axis and blue trouser on the x-axis)

Give a short answer with graph.

Producer production function is Y = 8X+2X²-4/3X³ Price of the product is 5 per unit and price of the input is 25 per unit. What is the level of output at the equilibrium level of production?

Max    u=q₁^6 q₂^4+1.5Ln(q₁ )+Ln(q₂)

s.to

3q₁+4q₂=100

1. An economist in Kenya argued that 3.5% of all SMEs would file for bank loans next year. For a random sample of 100 SMEs, estimate the probability that at least three will file bank loans next year. Assuming that the economist’s prediction is correct.

2. A politician believes that 25% of all macroeconomists in senior positions would strongly support a proposal he wishes to advance. Suppose that this belief is correct and that five senior macroeconomists are approached at random. What is the probability that at least one of the five would strongly support the proposal?

what happens if rent controls are eliminated