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Numerical problem on consumer surplus: Assume that the demand for travel over a
bridge takes the form Y = 1,000,000 – 50,000P, where Y is the number of trips over the
bridge and P is the bridge toll (in dollars).
a. Calculate the consumer surplus if the bridge toll is $0, $1, and $20.
b. Assume that the cost of the bridge is $1,800,000. Calculate the toll at which the bridge
owner breaks even. What is the consumer surplus at the breakeven toll?
c. Assume that the cost of the bridge is $8 million. Explain why the bridge should be built
even though there is no toll that will cover the cost
How would you explain the inverted “U” nature (downward curvature) of the Marginal Product (MP) Curve? How relevant is this concept to the Manager who would like to hire labour given the plant size?
Graphically show the total, average and marginal product curves for labour with capital as a fixed input.
Demonstrate how intra and inter temporal choices models can make society incur an opportunity cost if not managed adequately and effectively
What do you understand by the concepts is intra and inter temporal choices model
3. The following is the hypothetical supply and demand schedule for sugar:
Price (Tk.)
Quantity demanded
(Kg)
Quantity Supplied
(Kg)
4
1000
400
8
800
400
12
600
400
16
400
400
20
200
400
a) Plot the demand and supply curve for sugar
b) Find the equilibrium price and quantity of sugar
c) What will happen to equilibrium price and quantity if incomes of the consumers of sugar (normal good) are increased?
600 words total Please
1. By giving examples describe what happens when we have a lack of competition in a monopolistic market?
2. By giving examples describe what happens when there is a lack of substitutes in a monopolistic market?
Suppose you are given the following data on demand for a product. The price
elasticity of demand when price decreases from $9 to $7 is:
Price ($) Quantity Demanded
10 30
9 40
8 50
7 60
6 70
Problem 1:
What do understand by the terms prior and posterior probabilities in relation to Bayes’ theorem?
Problem 2:
The problem with this disease is that once the first symptoms are observed and the veterinarian contacted, it can take several days for tests to be conducted and the results to be obtained. During this time, the disease can spread to other farms. However it is possible to carry out a quick test by the farmer, which will correctly diagnose the disease 80% of the time. Unfortunately, the test is prone to give a false positive reading on 40% of occasions, i.e. the probability that the test will give a positive reading when in fact the disease is absent is 0.4.
- Draw a probability tree diagram to show how the prior probabilities and the conditional outcomes of the test can be combined to give the posterior probabilities.
a manufacture has 15 years, 8.5 mortgage for 100,000 birr on a building payment are made monthly.
a. find the month payment
b. how much interest will be paid
