Microeconomics Answers

Giving the diversity of developing countries, do you think that there could ever be a single unified theory of development?

5. Let X represents the number of computers in an Australian household, for those that own a computer.



a. Find and interpret the expected number of computers in a randomly selected Australian
household. (2 marks)
b. What is the probability that a randomly selected Australian household will have more than 2
computers? (1 mark)
c. Find V (4X +2). (1 mark)
d. Find E(30X + 20]. (1 mark)

Explain whether each of the following statements describes a change in demand or a change in quantity demanded, and specify whether each change represents an increase or a decrease.
a. Baby Steps Footwear experiences a 40 percent increase in sales of baby shoes during a 3-day, half-price sale.
b. Tabitha gets a promotion and 15 percent increase in her salary and decides to reward herself by purchasing a new 3-D television.
c. When the price of peaches unexpectedly rises, many consumers choose to purchase plums instead.
d. Due to potential problems with its braking system, Asteriod Motors has experienced a decline in sales of its Galactica automobile.
e. Antonio, an accountant working for the city of Santa Cristina, decides to forego his annual vacation to Hawaii when word leaks out that the city may be cutting all employees’ salaries by 10 percent at the end of the year.

Microeconomics is also called as

2. List three ways in which we can determine a good model fit? (3 marks)

Some high school teachers, teaching schools in outer islands demand an increase in meal allowance. According to a recent survey, the average cost of a meal is $6 in Ba. Suppose this figure is based on a sample of 27 different restaurants with a sample standard deviation of $1. Construct a 95% confidence interval for the population mean cost of a fast food meal in Ba. Assume that the cost of fast food meals in Ba is normally distributed.

Giving the diversity of developing countries, do you think that there could ever be a single unified theory of development?

2. A life-extending drug is very expensive to produce. The equilibrium price for the
drug is very high, such that some people who could benefit from the drug simply
cannot afford to buy it. The government is considering a program that would cover
50% of the price of the drug. People who buy the drug would pay half the price,
and the government would pay the other half.

(a) Show the effect of this policy on the supply curve, demand curve, or both.
(Note: The government pays a percent of the price, NOT a given dollar amount
independent of price. That is, the government does NOT pay, say, $100 for
each unit sold, no matter what the price of the drug. Rather, the government
pays $100 if the price is $200, it pays $150 if the price is $300, and so on. This
fact affects the way the curves shift.)

How does the labour demand curve shift when the number of college and university graduate drops?