Learn more about our help with Assignments: Microeconomics
Search & Filtering
Microeconomics
true or false, Suppose a household faces an increase in the price of food and the government responds by transferring to the household enough extra income that it could purchase its original bundle of “food” and “other goods”. Under these circumstances, the household will choose to purchase its original bundle.
Microeconomics
Your utility function for apples and bananas is U(A,B) = A4 B4 , where pA = pB = 1 (in £
per unit) initially.
- (a) If your exogenous income is m = 100 (in £), then find the optimal consumption of apples and bananas, A∗ and B∗, respectively, as well as the maximised level of utility,U(A∗,B∗).
- (b) If now p′A = 2, then find the new optimal consumption bundle, (A∗∗, B∗∗), along with the maximised utility level, U(A∗∗,B∗∗).
- (c) How much should income be increased by in part (b) so that the maximised utility level of part (a) is just attainable?
Microeconomics
Suppose the firms in a competitive industry face pandemic safety costs that take the form of $S per period. In the long run does this lead to an increase in market prices in this industry?
Microeconomics
True or false : A small business that takes a government loan designed to help it stay open during the pandemic bears the interest cost of the loan, while a similar small business that uses its owner’s funds for a similar purpose bears no similar costs for it to stay open.
Microeconomics
What is the relationship between the marginal product and marginal cost curves?
Microeconomics
A2-6. Suppose the output (q) produced by different amounts of labour (L) hired by a firm is given below:
Labour 0 1 2 3 4 5 6
Quantity 0 3 9 18 24 27 28
(d) Suppose this firm operates in a perfectly competitive market where the market price is $4.00 per
unit of output. How many units will the firm produce? What if the market price is $12.00? What
if the market price is 36.00? [5]
(e) Assume that the short-run cost curves are drawn for the long-run efficient plant size and that all
firms in the industry are identical. Are any of the market prices from part (d) a long-run
equilibrium price? Explain. [5]
(just answer e)
Labour 0 1 2 3 4 5 6
Quantity 0 3 9 18 24 27 28
(d) Suppose this firm operates in a perfectly competitive market where the market price is $4.00 per
unit of output. How many units will the firm produce? What if the market price is $12.00? What
if the market price is 36.00? [5]
(e) Assume that the short-run cost curves are drawn for the long-run efficient plant size and that all
firms in the industry are identical. Are any of the market prices from part (d) a long-run
equilibrium price? Explain. [5]
(just answer e)
Microeconomics
Given the following demand and supply function answer the following questions:
Qd= 300-20PQs= -100+20P
a. Find the equilibrium quantity and price and illustrate the same on a graph. Also, explain if it is static or comparative equilibrium.
b. Suppose the price is fixed at Rs. 5, now find if the market is in equilibrium or not? Illustrate it graphically also and explain about the demand and supply.
c. Suppose the price is fixed at Rs. 15, now find if the market is in equilibrium or not? Illustrate it graphically also and explain about the demand and supply.
d. Suppose the good in question is normal explain the effect of increase in the consumer income on the equilibrium. Also, explain if it is static or comparative equilibrium with the reference to your answer in part a.
Qd= 300-20PQs= -100+20P
a. Find the equilibrium quantity and price and illustrate the same on a graph. Also, explain if it is static or comparative equilibrium.
b. Suppose the price is fixed at Rs. 5, now find if the market is in equilibrium or not? Illustrate it graphically also and explain about the demand and supply.
c. Suppose the price is fixed at Rs. 15, now find if the market is in equilibrium or not? Illustrate it graphically also and explain about the demand and supply.
d. Suppose the good in question is normal explain the effect of increase in the consumer income on the equilibrium. Also, explain if it is static or comparative equilibrium with the reference to your answer in part a.
Microeconomics
Sahar is analyzing the probability to open her own beauty salon. If she chooses to operate her own salon she would have to pay Rs. 70,000 p.m as rent and staff that would cost her Rs. 30,000 p.m and is expected to earn Rs. 150,000 p.m. While if she continues working as the head makeup artist in one of renowned salons of Karachi she would earn 120,000. Analyze the information above and find explicit and implicit cost.
Microeconomics
51. Suppose that a firm has the production function
Q = 2K1/2 L1/2
Assume that the capital stock is fixed at 9 units (i.e. K =9). If the price of output (P) is $6 per unit, and the wage rate (w) is $2 per unit, determine the optimal or profit-maximizing rate of labor to be hired. What labor-input rate is optimal if the wage rate increased to $3 per unit?
Q = 2K1/2 L1/2
Assume that the capital stock is fixed at 9 units (i.e. K =9). If the price of output (P) is $6 per unit, and the wage rate (w) is $2 per unit, determine the optimal or profit-maximizing rate of labor to be hired. What labor-input rate is optimal if the wage rate increased to $3 per unit?
Microeconomics
Mariam just inherited an amount of money. While she plans to squander some of it away, how much should she deposit in an account earning 5% interest per year if she would like to have OMR 10,000 in the account in 10 years?
