Microeconomics Answers

Salma makes six EOY deposits of OMR 4,000 each in a savings account paying 7% compounded annually. If the accumulated account balance is withdrawn at the end of the 6th year, how much money will be withdrawn?

Suppose Eve allocate $3000 of her monthly income to the purchase of cheese cakes and soda of which she receives a marginal utility of 1200 for cheese cake and 400 for soda
i. Illustrate the Eve budget lines when the price of cheese cake increase by $100

Nominal gross domestic product for the United States was $7,661.6 billion in 1996 and $8,110.9 billion in 1997. The GDP deflator was 109.5 in 1996 and 1996 and 111.6 in 1997. Given the above data, complete the following questions. Show the work.
1. What was the 1997 real GDP expressed in 1996 prices?
2. What were the 1996 and 1997 GDPs expressed in base-year prices?
3. What was the percent change in the nominal GDP between 1996 and 1997?
4. What was the percent change in real GDP between 1996 and 1997?
5. What was the inflation between 1996 and 1997?

b)Define a competitive market equilibrium.
i. Are consumers maximizing their utility? If so, what do we expect about the relationship between consumer’s subjective valuations and market prices?
Yes, consumers are maximizing their utility.

ii. Are firms minimizing their costs of production? If so, what do we expect about the relation-ship between firms’ internal input valuations and market prices?

6. A firm currently produces 500 units of a good X and 300 of a good Y using its resources. In the following week it decides to produce 600 units of X and 250 of Y. What is the opportunity cost of the decision to produce 100 more units of X?

For the production function given by q=e^0.3tK^0.75L^0.25 where the technical coefficient is denoted by e^0.3t. Both K and L grow at the rate at 1% per annum each, compute the annual growth rate of output

a country's income tax system it allows 8000 to be tax free . her income from 8000 to 20000 is 15% , her income from 20000 to 40000 is 30% and the income above 40000 is 50% . the income she earns is 54000 . calculate her taxable income

a country's income tax system it allows 8000 to be tax free . her income from 8000 to 20000 is 15% , her income from 20000 to 40000 is 30% and the income above 40000 is 50% . the income she earns is 54000 . calculate her taxable income

A firm is in the business of assembling computers and it has the following production function q=l^1/3k^1/2, where l and k are measures of labor and capital input used to produce q number of pcs that are sold in the market at a fixed price= p per pc. Cost of one unit of l and k are w and v respectively.
a) Does this production function exhibits increasing, decreasing or constant returns to scale.
b) Find the firm's conditional demand for labor in the short run when capital is fixed at k(bar)=81.
c) Find the firm's conditional demand function for labor and capital in the long run.
d) Find also the profit maximising level of output.{in unconditional profit function}