Microeconomics Answers

Taiwan is the major world supplier of semiconductor chips. A recent earthquake severely damaged the production facilities of the Taiwanese chip producing companies, sharply reducing the amount of chips they could produce.

a. Assume that the total revenue of a typical non-Taiwanese manufacturer rises due to this event. In term of an elasticity, what must be true for this to happen?

b. Illustrate the change in total revenue with a diagram, indicating the price effect and the quantity effect of the Taiwan earthquake on this company’s total revenue.

c. Now assume that the total revenue of the typical non-Taiwanese chip manufacturer falls due to these event. In terms of elasticity, what must be true for this to happen?

d. Illustrate the change in total revenue with a diagram, indicating the price effect and the quantity effect of the Taiwan earthquake on this company’s total revenue.

Statistics Canada’s analysis of the 2021 Census data includes the following graphic describing the spatial concentration of population in the urban core across urban areas. Develop a theoretical explanation of how density in the centre depends on city size.

1. Inflation is a sustained increase in the general or average level of prices. If now a day inflation in Ethiopia, how you prove it? At what percentage? Compare it with its base year. Hint: CPI

Suppose a particular consumer has 8 birr to be spent on two goods, A and B. The unit price

of good A is 2 birr and the unit price of B is 1 birr. The marginal utility (MU) she gets from

consumption of the goods is given below.

Suppose the government implements an expansionary fiscal policy to finance e-toll gantries. Required ∆Y = R1 000, the marginal propensity to consume is 50% and the proportional tax rate is 40%. How much will government expenditure have to change to reach the required change in equilibrium income?

The resource-based vuew of the firm is a new paradigm that suggests a firm's sustainable competitive advantage depend heavily on the form's resources and how they are used. Present the key concepts of these theoretical paradigm. Use examples to demonstrate related phenomena and discuss how they suggest directions for expanding the scope of optimisation models for supply chain management especially when they are linker to "shadow price" and taxonomy of resources. Additiomally discuss how these theoretical concepts can be used in economic interpretation of optimal solutions.

The supply chain database decision is a relatively new concept and is used to generate optimisation models that provide rigorous and comprehensive representation of the supply chain for the purposes of determining effective plans. Discuss the structure and data requirements of the main components of the supply chain database and its relationship to the transactional database

QUESTION 1:

A firm faces the demand schedule p = 200 - 2Q and the total cost function

TC = 2/3 Q^3 - 14Q^2 + 222Q + 50

Derive expressions for the following functions and find out whether they have maximum or minimum points. If they do, say what value of q this occurs at and calculate the actual value of the function at this output.

Marginal cost.

Average variable cost

Average fixed cost

Total revenue

Marginal revenue

Profit

Construct your own example of a function that has a turning point. Check the second-order conditions to confirm whether this turning point is a maximum or a minimum.

Explain why a firm which is a monopoly seller in a market with the demand schedule P = 66.8 - 0.4Q and which faces the total cost schedule TC = 220 + 120Q - 12Q^2 + 0.5Q can never make a positive profit.

Suppose the supply curve for good X passes through the point P 5 $25, Qs 5 500. Give two interpretations of this point on the supply curve.

Some restaurants have shortened their hours of operations (opening later and/or closing earlier) rather than shut down completely. Why might that be a good idea? Explain your reasoning using the relevant economic concepts.