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What is the basic difference between cardinal and ordinal approaches of utility?
Which of the following is incorrect statement? *
Engineering Economics assesses economic viability of alternative feasible engineering alternative
Engineering economic solves the problem of uncertain future
Engineering economics supplements the task of accountant
Engineering economics reveals which cost and benefits need to be taken unto account in a specific case
A company has the capacity that can be used to produce a steel cup-board which it has been buying for Rs. 2000 each. If the company makes the steel cup-boards, it will incur materials cost of Rs. 800 per unit, labour costs of Rs. 400 per unit, and variable overhead costs of Rs. 200 per unit. The annual fixed cost is Rs. 25,00,000. Demand over the next year is estimated at 8,000 units. Would it be profitable for the company to make the steel cup-boards?
Explain briefly and give practical example on the following concepts. (3 points)
a) Explicit cist
b) Implicit cost
c) External cost
d) Social cost�
A consumer has $100 to spend on two goods X and Y with prices $3 and $5 respectively. Derive the equation of the budget line and sketch the graph
3. A cloth producing firm in a perfectly competitive market has the following short-run total cost function: TC = 6000 + 400Q – 20Q2 + Q3 . If the prevailing market price is birr 250 per unit of cloth,
A) Should the firm produce at this price in the short-run?
B) If the market price is birr 300 per unit, what will be the profit (loss) of the firm at equilibrium? Should the firm continue to produce or not?
C) Calculate the shut-down price of this firm?
4. Assume a wheat producing farmer engaging in selling its product under perfect competition market faces cost functions as TC= Q3 -2Q2 +8Q and Average revenue of the farmer is given as Birr 8 . Having this information, A) Determine the optimal level of output and price in the short run.
B) Calculate the economic profit (loss) the farmer will obtain (incur)
C) What will be the minimum price level the farmer gets to continue in wheat production?
3. A cloth producing firm in a perfectly competitive market has the following short-run total cost function: TC = 6000 + 400Q – 20Q2 + Q3 . If the prevailing market price is birr 250 per unit of cloth,
A) Should the firm produce at this price in the short-run?
B) If the market price is birr 300 per unit, what will be the profit (loss) of the firm at equilibrium? Should the firm continue to produce or not?
C) Calculate the shut-down price of this firm?
4. Assume a wheat producing farmer engaging in selling its product under perfect competition market faces cost functions as TC= Q3 -2Q2 +8Q and Average revenue of the farmer is given as Birr 8 . Having this information,
A) Determine the optimal level of output and price in the short run.
B) Calculate the economic profit (loss) the farmer will obtain (incur)
C) What will be the minimum price level the farmer gets to continue in wheat production?
1. Davit plans to consume two goods (good x and good y) with a limited budget. If Davit's budget line has intercepts 100 units of good x and 50 units of good y and price of good x (Px) is $100. Then, answer the next three questions.
A) What are Davit's income and Price of good y (Py)
B) What is the simplified version of Davit's budget line equation?
C) If Davit's utility function is given by U(X; Y) = X0.5Y 0.5, how many units of good X and good Y would he consume if he choose the bundle that maximizes his utility subject to his budget constraint?
2. Consider the following total cost function: TC = 2/3Q3 – 10Q2 + 200Q + 50
A) Identify the FC and VC function?
B) Calculate AVC, AFC, ATC, and MC functions
C) Determine the level of output at which AVC reaches minimum point and the minimum AVC at that level of output?
7. Assume Amanda always maximizes her total utility given her budget constraint. Every morning for breakfast she has four eggs and two sausages. If the marginal utility of the last egg is 10 units and the price of eggs is $2 each, what can we say about the marginal utility of the last sausage if the price of each sausage is $2?
A. It must be equal to 10 units.
B. It must be equal to 5 units.
C. It must be equal to 1 unit.
D. It must be equal to 20 units.
. Discuss the issues and challenges faced with regard to implementation to the Right to Education.
