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Microeconomics
Angie has 12 cookies, and a marginal value curve described by P = 45 - 3QA, while Benny has zero cookies, and a marginal value curve described by P = 44 - QB.
a) Draw a three-sided trade diagram, with Benny's marginal value curve going
from left to right, and Angie's going from right to left. Be careful to state how wide the diagram is in terms of units of cookies. Draw both marginal value curves in this diagram.
b) How might we interpret Angie's marginal value curve in this context? What are their marginal values before trade?
c) After trade, how many cookies do each of them have? What is the marginal value of each person after trade?
d) If we assume that all cookies traded at a price equal to the final marginal values, what are the consumer and seller surplus from trade?
a) Draw a three-sided trade diagram, with Benny's marginal value curve going
from left to right, and Angie's going from right to left. Be careful to state how wide the diagram is in terms of units of cookies. Draw both marginal value curves in this diagram.
b) How might we interpret Angie's marginal value curve in this context? What are their marginal values before trade?
c) After trade, how many cookies do each of them have? What is the marginal value of each person after trade?
d) If we assume that all cookies traded at a price equal to the final marginal values, what are the consumer and seller surplus from trade?
Microeconomics
5. Which of the following commodities has inelastic demand and why?
a) Soap
b) Salt
c) Cigarettes
d) Ice cream.
a) Soap
b) Salt
c) Cigarettes
d) Ice cream.
Microeconomics
a) Define equilibrium price and equilibrium quantity with a suitable diagram.
b) The demand function for ice cream cones is P = 800 - 2Q, and the supply function of ice cream cones is P = 200 + 1Q.
The price of a cone is expressed in cents, and the quantities are expressed in cones per day.
i) Determine the equilibrium price and quantity.
ii) Draw the curve and show the equilibrium price and quantity according to answer in (i).
iii) What will happen in the market when the market price is lower than the
equilibrium price? Explain.
b) The demand function for ice cream cones is P = 800 - 2Q, and the supply function of ice cream cones is P = 200 + 1Q.
The price of a cone is expressed in cents, and the quantities are expressed in cones per day.
i) Determine the equilibrium price and quantity.
ii) Draw the curve and show the equilibrium price and quantity according to answer in (i).
iii) What will happen in the market when the market price is lower than the
equilibrium price? Explain.
Microeconomics
it is orthodox to say people’s desire has no boundary from the time past, even in the face realistic limited resources, individual agents never stop to want more of economic output”.
Microeconomics
price mechanism role in market action by allocating scarce resources among competing needs in free market and provide a real world example
Microeconomics
why is the supply curve upwards sloping
Microeconomics
By the use of the concept of consumer surplus and marginal utility, explain how you will solve the water problem in your community if water is not metered.
Microeconomics
Using appropriate examples, explain why the existence of negative externalities and public good causes market failure.
Microeconomics
The demand and supply functions of beans are respectively given as 20QB +15PB-5PR=6000 and 10QB-15PB=1200. Similarly, the demand and supply of rice are QR+PR-PB=250 and 3QR-7PR=710. PB and PR are prices of beans and rice. QB is demand of beans and QR is demand of rice. Find the equilibrium price and quantity of beans and rice. A rice and beans substitute? Explain your answer.
Microeconomics
Income and substitution effect
