Microeconomics Answers

An appreciation of the rand against the dollar
(1) Will worsen the current account balance but improve domestic prices.
(2) Improve the current account balance but worsen domestic prices.
(3) Improve the current account balance as well as reduce domestic prices.
(4) Worsen both the balance on the current account as well as domestic prices.

Qb)The current price in the market for apples is $0.10 per kg. At this price, 1 million kg are sold per year. The price elasticity of demand is –5 and the short run price elasticity of supply is 0.05. Solve for the equations of demand and supply, assuming that demand and supply are linear.

• Suppose the demand curve is given by : Qd = 10 – 2P + Ps
Where: P is the price of the product and Ps is the price of a substitute good. The price of Ps = $2

• Suppose P = $1. What is the price elasticity of demand
• What is the cross price elasticity

If the price of P becomes $2
• What is the price elasticity of demand

• There are two goods X and Y. Tabithas Utilities are given by U = 1/3X2 + 2 Y1/2. If the price of X is $2 and the Price of Y is $0.75 What is Tabithas optimum bundle?

how long will it take a given sum of money to increase 4 times its present value when compounded half yearly at 7% rate of interest

21. A firm operates in a perfectly competitive market. The market price of its product is 4
birr and the total cost function is given by: TC= 1/3Q3-5Q2+50,
a. What level of output should the firm produce to maximize its profit?
b. Determine the level of profit at equilibrium.
c. What minimum price is required by the firm to stay in the market?

Given the demand function PD=27-Q²and supply function PS=2Q+3 Assuming perfect competition find the consumer surplus and producer surplus

Given the demand function PD =27-Q2 and supply function PS =2Q+3 Assuming perfect competition find
1. The comsumers surplus
2. The producer's surplus

Is it better to crack down on price gougers or spark a reform on counter-
productive laws instead?

Assume you work as an economist at Ministry of Housing. Assume that following supply-side disruptions
due to COVID-19 pandemic, construction materials (for example, steel and timber) prices go up around the
world (including in Fiji). The Director Housing has asked you to prepare a short essay report that explains
the various repercussions of higher construction materials prices. In your essay:
a) Use a relevant diagram to show and discuss the impact of rising construction materials prices
with the context of domestic property market.
b) Examine the impact on:
 housing affordability;
 profitability of real estate companies;
 sales commissions earned by real estate agents.
c) Discuss briefly two policy options to address some of the undesirable implications of higher
construction materials prices.

Suppose that the price of basketball tickets at your college is determined by market forces. Currently, the demand and supply schedules are as follows:
Price Quantity Demanded Quantity Supplied
$2 5,000 tickets 4,000 tickets
4 4,000 4,000
6 3,000 4,000
8 2,000 4,000
10 1,000 4,000

a. Draw the demand and supply curves. What are the equilibrium price and quantity of tickets?
b. Your college plans to increase total enrollment next year by 2,500 students. The additional students will have the following demand schedule:
Price Quantity Demanded
$2 2,000 tickets
4 1,500
6 1,000
8 500
10 0
Add the old demand schedule and the demand schedule for the new students to calculate the new demand for the entire college. What will be the new equilibrium price and quantity?