Microeconomics Answers

Are confrence fees included in the producer price index

1. The demand for ice cream cones is P=1600 and Qd is 2 The supply of ice cream cones is P =400 and Qs is 1. The price of a cone is expressed in cents, and the quantities are expressed in cones per day. To find the equilibrium price (P*) and the equilibrium quantity (Q*), substitute Q* for QD and QS and P* for P. (8 marks). (FOR QD, P=a-bQd and for QS, P=c+dQS). 2. The demand and Supply Schedules for potato chips are:
Price(rand per bag) Quantity demanded(millions of bags a week)
Quantity Supplied(millions of bags a week)
5 160 130 6 150 140 7 140 150 8 130 160 9 120 170 10 110 180
a. Draw a graph of the potato chip market and mark in the equilibrium price and quantity. (10 marks)
b. if the price is R6 a bag, is there a shortage or a surplus and how does the price adjust? (5 marks)

John Scott has R200 per week available to spend on beer and cigarettes. Beer costs R10 per bottle and cigarettes cost R40 per packet. Suppose John buys 8 bottles of beer and 3 packets of cigarettes and that his marginal utility from beer is then 20 utils and that from cigarettes 35 utils. Is he in equilibrium? If not, should he buy more beer or more cigarettes? Explain.

how to illustrate a change in demand If there's an increase of interest in toys

1. A monopolist faces the demand curve Q = 60-P/2. The cost function is C=Q2
. Find
the output that maximises this monopolist’s profits. What are the prices at profits
and that output? Find the elasticity of demand at the profit maximising output.

When the price of notebooks falls from 5 to 2, the quantity demanded of notebooks rises from 120 to 279. What is the price elasticity of demand of notebooks? (Enter your answer as a decimal rounded to two decimal places, not a fraction and do not put a negative sign)

n the labour market for carpenters, the current market clearing wage rate is R800 per day. With the
aid of a diagram, discuss the welfare effects of government intervention in the form of legislation that
sets the minimum wage rate for a carpenter at R1000 per day.

What would be the impact on Inflation and unemployment if there is a sustain decrease in aggregate demand?

Tom is a full-time lecturer at a private higher education institution and is considering a career in carpentry. He wishes to pursue a career in carpentry (a childhood dream) which he has studied part-time and is now equipped to take on clients. In his current position he earns a rate of R1000 per day and if he were to pursue a career in carpentry he would earn R800 per day. Due to the flexibility of the employment conditions at the higher education institution he works for, Tom can negotiate the number of days he works at and will receive a rate of remuneration based on the number of days worked.

1.2 Discuss the underlying assumption of the shape of the above drawn diagram and comment on how likely this could be true with respect the above scenario


1.4 Discuss a factor that would lead to an inward shift of the curve drawn

Tom is a full-time lecturer at a private higher education institution and is considering a career in carpentry. He wishes to pursue a career in carpentry (a childhood dream) which he has studied part-time and is now equipped to take on clients. In his current position he earns a rate of R1000 per day and if he were to pursue a career in carpentry he would earn R800 per day. Due to the flexibility of the employment conditions at the higher education institution he works for, Tom can negotiate the number of days he works at and will receive a rate of remuneration based on the number of days worked.
Question 1
1.1 Construct a production possibility frontier to illustrate Tom’s earnings potential between the two careers if initially he was not working as a carpenter, then he worked one week per month, then two, then three and finally four weeks per month (assuming only four weeks in a month