Microeconomics Answers

Now suppose that GDP increases as U.S. manufacturers produce more output. What impact will this have on the independent trucking industry in the short run, in terms of the market price, output of an individual firm, and market equilibrium quantity? Explain your reasoning. What impact will the increase in manufacturing output have in the long run?

4) Draw the shifts in the PPF (hotel rooms and airline seats), between 2016 and 2020 as accurately as possible given the data in the case study. Explain your reasons.

10) If total costs per passenger for Fly Dubai are 70% of revenue, and of those, 70% are fixed costs, calculate total fixed costs for Fly Dubai in 2015.

Question 2

(a) Assess the following statement: “If economists just had enough data, they could solve all policy questions in a way that maximizes social good. There would be no need for divisive policy debates, such as whether the government should continue to provide petroleum subsidy for all Nigerians.

(b) Of recent, the corona virus pandemic, the lock down and the #Endsars movement has caused major micro-economic disruption, has been biting; people are having a hard time and are finding it difficult to make ends meet. Many states in Nigeria including Bayelsa are owing workers salaries. Consumers are faced with making numerous economic adjustments to deal with the difficult situation. Discuss three examples of economic adjustments made by households, kindly use economic theory in explaining your answers.

Suppose the firms in a competitive industry face pandemic safety costs that take the form of $S per period. In the short run this leads to an increase in market prices in this industry.

T or F If a household supplies same amount of labour before and after an increase in wage rate, the household considers leisure to be a normal good.

explain why any firm maximises profit, or minimises losses, when marginal cost is equal to marginal revenue

You are running a photography business. You look at your demand and have to decide what price to charge. Since you are the only photographer in town, you are free to act as you wish. Suppose that the cost of producing each photograph was $12, how much would you charge? Why?

paul’s demand function for good x is given by x(px,ly,m)=2m/5px. his income, m, is £1000, the price of x,px, is £5 and the price of y, pay, is £20.
what will be the change in paul’s demand for good x if the price of good falls to £4?