Microeconomics Answers

Microeconomics

4. You are an intern to the editor of a small-town newspaper in Mallsburg, Pennsylvania. Your boss, the editor, asks you to write the first draft of an editorial for this week’s paper. Your assignment is to describe the costs and the benefits of building a new bridge across the railroad tracks in the center of town. Currently, most people who live in this town must drive 2 miles through thickly congested traffic to the existing bridge to get to the main shopping and employment center. The bridge will cost the citizens of Mallsburg $25 million, which will be paid for with a tax on their incomes over the next 20 years.What are the opportunity costs of building this bridge? What are the benefits that citizens will likely receive if the bridge is built? What other factors might you consider in writing this editorial?

Read answer

Answered!

Question #140035

Microeconomics

From the firm's perspective, is an accounting profit of zero a good result, a bad result, or merely a satisfactory result? Why? Is an economic profit of zero a good result, a bad result, or merely a satisfactory result? Why?

Read answer

Answered!

Question #139974

Microeconomics

Goods A and B are related goods.

The price of good A is $6.

When the price of good B is $29, demand for good A is P = 9 - 0.025QA.

When the price of good B is $31, demand for good A is P = 11 - 0.02QA.

Calculate the cross price elasticity of demand.

Read answer

Answered!

Question #139908

Microeconomics

John’s utility function is given by the following equation

𝑈(𝑥, 𝑦) = min(2𝑥, 5𝑦),

where x is the unit of good X consumed, and y is the unit of good Y consumed. John’s budget is $140, price of good X (𝑃𝑋) is $3, and price of good Y (𝑃𝑌) is $10. Show all the steps, with definition of every new notation used in the steps.

a) What is John’s optimal consumption (𝑥 ∗ , 𝑦 ∗ )? Graph the optimal consumption along with appropriate budget line and indifference curve.

b) If 𝑃𝑋 decreases from $3 to $2, what is the new optimal consumption (𝑥𝐹, 𝑦𝐹)? Graph the new optimal consumption along with appropriate budget line and indifference curve on part a)’s graph.

Read answer

Answered!

Question #139891

Microeconomics

Draw a circular flow diagram. Identify the parts of the model that correspond to the flow of goods and services and the flow of rupees for each of the following activities:

a. Laiba pays a shopkeeper Rs.100 for a quart of milk.

b. Sarah earns Rs. 450 per hour working at a fast food restaurant.

c. Tahura spends Rs. 300 to get a haircut.

d. Hajra earns Rs. 100,000/- from her 10 percent ownership of PIA.

e. Sidrah spend Rs. 1,000/- to get a Pizza.

Read answer

Answered!

Question #139842

Microeconomics

Suppose the demand equation for computers by Teetan Ltd for the year 2017 is given by Qd= 1200-P and the supply equation is given by Qs= 120+3P. Find equilibrium price and analyse what would be the excess demand or supply if price changes to Rs 400 and Rs 120.

Read answer

Answered!

Question #139835

Microeconomics

Higher interest rates to combat inflation and inflation targets are often criticized of
suppressing development and lowering the quality of life of many people. It is for this
reason that trade unions often oppose to inflation targets and the traditional
measures to achieve this. Are all these arguments true and relevant? Evaluate and
discuss this critically?500-600 words

Read answer

Answered!

Question #139822

Microeconomics

U.S. apple juice and cider production increased from 86 million gallons in 1970 to around 200 million gallons in late 1990. We assume that imported apple juice is differentiated by country of origin, where apple juice imports from Brazil and China (for example) are considered imperfect substitutes due to origin-specific factors. However ,there is a huge surge in the demand for the apple juice in various seasons. Suppose that in one summer the weather is very hot. How does this event affect the market for apple juice? Initially the equilibrium price is $3, quantity demanded and supplied is 5 bottles of apple juice. Further increase in demand affects equilibrium .Illustrate how an Increase in Demand affects the Equilibrium and how a Decrease in Supply Affects the Equilibrium if the price of cider is increasing with the help of graph ?

Read answer

Answered!

Question #139821

Microeconomics

Suppose that two firms are producers of spring water, which can be obtained at zero cost. The marginal revenue for their combined output is MR =10-2Q where MR is marginal revenue and Q is the number of litres of spring water sold by both firms per hour. If the 2 producers act according to the oligopoly model, how much will their combined output be? How much is the market price of water per litre?

Read answer

Answered!

Question #139808

Microeconomics

In April 2007, there was shortage of Ghacem cement in the country which led to a rise in the
price of Ghacem cement. The government then intended to put a price ceiling on cement in
the country to minimize the loss to users of cement for construction purposes. Some people
were of the view that “the fixing of a price ceiling for cement in the country will not have any
effect”. Briefly discuss with the aid of an appropriate diagram, the effect of the imposition of
price ceiling on Ghacem cement market.

Read answer

Answered!

Search & Filtering