Microeconomics Answers

Cebu Pakpak is a national airline providing shuttle between different destinations in the country
and abroad. An analysis of the monthly demand for service has revealed the following demand
relation

Q = 26000 – 500P – 250P OG + 200I B – 5000S

Where Q is quantity measured by the number of passengers per month, P is price (P), P OG is a
regional price index for other consumer goods, I B is an index of business activity, and S, a binary
or dummy variable, equals 1 in summer months and 0 otherwise.
a. Determine the demand curve facing the airline during the month of December if P OG = 4 and
I B = 250.
b. Determine the demand curve facing the airline, quantity demanded, and total revenues
during the summer month of April if P=P100 and all other price-related and business activity
variables are as specified previously.

find the substitution effect on consumption of peas due to the decrease in the price of peas in (c).

after The decrease in the price of peas to 20N,assume that John is just as well of as he was in (a) if he has an income of zmw7.6.However,with that income and the new price of peas he would have consumed 20kg of beans.find the quantity of peas he would have consumed in this case.

assume that the price falls from 40N to 20N,assuming that John still consumes 30kg of beans,find the new quantity of peas

Analyze the effect of the price selling in the market for wheat on equilibrium price and quantity.will consumer/ producer/ both because of this price selling? Explain using change in consumer and producers surpluses.

Show that indifference curves are (a) convex to the origen (b) cannot intersect one another? what behaviour assumption must be true in each case.

Explain micro comparative static point.

What is elasticity of substitution?

What is cross demand