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Microeconomics
It is argued that monopoly is a bad thing for consumers, but a good thing for producers. Illustrate the argument using diagrams and assuming the industry is faced with constant cost.
Microeconomics
The amount of Mangoes that are produced each year by a farmer in Waka Village is normally
distributed. The standard deviation of the bags of mangoes is identified as 0.04 grams.
Mangoes that too small and unripe are not bagged. Using your knowledge of hypothesis testing
and a 95% confidence level, execute a two – tailed to prove the claim that μ = 0.50 grams. The
sample mean is 0.51 grams and the sample size is 25 bags of mangoes.
distributed. The standard deviation of the bags of mangoes is identified as 0.04 grams.
Mangoes that too small and unripe are not bagged. Using your knowledge of hypothesis testing
and a 95% confidence level, execute a two – tailed to prove the claim that μ = 0.50 grams. The
sample mean is 0.51 grams and the sample size is 25 bags of mangoes.
Microeconomics
A maximizing worker with u(z, f) = z1/2f1/2 earns 60 dollars per day in non-labour income and is paid a wage of 5 dollars per hour. How many hours will she work. If she joins a union she will be paid a wage of 20 dollars per hour but she will have to pay a membership fee. What is the maximum daily fee she would pay to join this union?
Microeconomics
TC = 100Q - 10Q^2 +5Q^3
To find optimal level of output
To find optimal level of output
Microeconomics
Your firm must decide whether or not to introduce a new product. If you introduce the
new product, your rival will have to decide whether or not to clone the new product. If
you don’t introduce the new product, you and your rival will earn $1 million each. If
you introduce the new product and your rival clones it, you will lose $5 million and
your rival will earn $20 million (you have spent a lot on research and development,
and your rival doesn’t have to make this investment to compete with its clone). If you
introduce the new product and your rival does not clone, you will make $100 million
and your rival will make $0.
a. Set up the extensive form (the decision tree and the outcomes) of this game.
b. Should you introduce the new product?
c. How would your answer change if your rival has “promised” not to clone your
product?
d. What would you do if patent law prevented your rival from cloning your product?
new product, your rival will have to decide whether or not to clone the new product. If
you don’t introduce the new product, you and your rival will earn $1 million each. If
you introduce the new product and your rival clones it, you will lose $5 million and
your rival will earn $20 million (you have spent a lot on research and development,
and your rival doesn’t have to make this investment to compete with its clone). If you
introduce the new product and your rival does not clone, you will make $100 million
and your rival will make $0.
a. Set up the extensive form (the decision tree and the outcomes) of this game.
b. Should you introduce the new product?
c. How would your answer change if your rival has “promised” not to clone your
product?
d. What would you do if patent law prevented your rival from cloning your product?
Microeconomics
Suppose Toyota and Honda must decide whether to make a new breed of side
impact airbags standard equipment on all models. Side-impact airbags raise the price
of each automobile by $500. If both firms make side-impact airbags standard
equipment, each company will earn profits of $1.5 billion. If neither company adopts
the side-impact airbag technology, each company will earn $0.5 billion (due to lost
sales to other automakers). If one company adopts the technology as standard
equipment and the other does not, the adopting company will earn a profit of $2
billion and the other company will lose $1 billion. If you were a decision maker at
Honda, would you make side-impact airbags standard equipment? Explain.
impact airbags standard equipment on all models. Side-impact airbags raise the price
of each automobile by $500. If both firms make side-impact airbags standard
equipment, each company will earn profits of $1.5 billion. If neither company adopts
the side-impact airbag technology, each company will earn $0.5 billion (due to lost
sales to other automakers). If one company adopts the technology as standard
equipment and the other does not, the adopting company will earn a profit of $2
billion and the other company will lose $1 billion. If you were a decision maker at
Honda, would you make side-impact airbags standard equipment? Explain.
Microeconomics
Provide a discussion on the welfare effect of the above, that illustrates the case for when the above results in
unemployment in the market for domestic workers as well as a case for when the above has no effect on the
market for domestic workers. Use a diagram to support your discussion.
unemployment in the market for domestic workers as well as a case for when the above has no effect on the
market for domestic workers. Use a diagram to support your discussion.
Microeconomics
1. Show in a diagram the effect on the demand curve, the supply curve, the equilibrium price, and the equilibrium quantity of each of the following events.
a. The market for newspapers in your town.
Case 1: The salaries of journalists go up.
Case 2: There is a big news event in your town, which is reported in the newspapers.
b. The market for St. Louis Rams cotton T-shirts.
Case 1: The Rams win the national championship.
Case 2: The price of cotton increases.
c. The market for bagels.
Case 1: People realize how fattening bagels are.
Case 2: People have less time to make themselves a cooked breakfast.
d. The market for the Krugman and Wells economics textbook.
Case 1: Your professor makes it required reading for all of his or her students.
Case 2: Printing costs for textbooks are lowered by the use of synthetic paper.
a. The market for newspapers in your town.
Case 1: The salaries of journalists go up.
Case 2: There is a big news event in your town, which is reported in the newspapers.
b. The market for St. Louis Rams cotton T-shirts.
Case 1: The Rams win the national championship.
Case 2: The price of cotton increases.
c. The market for bagels.
Case 1: People realize how fattening bagels are.
Case 2: People have less time to make themselves a cooked breakfast.
d. The market for the Krugman and Wells economics textbook.
Case 1: Your professor makes it required reading for all of his or her students.
Case 2: Printing costs for textbooks are lowered by the use of synthetic paper.
Microeconomics
Each firm in a competitive market has a cost function of C =q÷q² +q³. The market has an unlimited number of potential firms, The market demand function is Q = 24- p. Determine the long-run equilibrium price, quantity per firm, mar ket quantity, and number of firms. How do these values change if a tax of $1 per unit is collected from each firm?
Microeconomics
Q1: What three conditions would result in the long-run supply curve for a domestically produced good being horizontal? For each explain what happens when the condition does not hold.
Q2: Navel oranges are grown in California and Arizona If Arizona starts collecting a specific tax per orange from its firms, what happens to the long-run market supply curve?
Q2: Navel oranges are grown in California and Arizona If Arizona starts collecting a specific tax per orange from its firms, what happens to the long-run market supply curve?
