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A. If a firm produce and sells q units of a particular product in the market. The total cost of producing q units is given by the function C(q) = 5q + 350 while the price firm received in the market is given by the function D(q) = 50 - q . Find
a. The profit function
b. The break-even value of q
c. The value of q that result in loss
Under perfect competition the rising firms marginal cost curve above minimum of avarage variable cost is what?
Defi ne the concept of a supply schedule or curve. Show that an increase in supply means a rightward and downward shift of the supply curve. Contrast this with the rightward and upward shift of the demand curve implied by an increase in demand.
Ford Motor has decided to buy a new equipment that costs $ 3,200,000. The equipment will be depreciated on a straight-line basis down to zero. The corporate tax rate is 35% and Ford Motor can borrow at 9%. Toyota Leasing Corp. is willing to lease the same equipment to Ford Motor for the lease payments of $ 0.95 million per year are due at the beginning of each of the four years of the lease.
a. Should Ford Motor lease the equipment or buy it outright?
b. What is the annual lease payment that will make Ford Motor indifferent to whether it leases the equipment or buys it?
Define Positive and Normative Economics and classify each of the following statements. (5)
a) Society faced a short-run tradeoff between inflation and unemployment
b) A reduction in the rate of money growth will reduce the rate of inflation
c) The State bank of Pakistan should reduce the rate of printing new currency notes
d) Society ought to require welfare recipients to look for jobs. e) lower tax rates encourage more work and more saving
f) Firms are showing a positive response to increase in demand of product
g) Decision of a worker to work less due to lower wages
h) Government legislation is targeting firms charging too high prices
What decision that the Honda and Proton made using by company and how to reduce the cost of production
What are the benefits associated with low cost of production?
"As the price of domestic automobiles has inched upward, customers have found foreign autos to
be a better bargain. Consequently, domestic auto sales have been decreasing, and foreign auto sales
have been increasing." Using only the information in this quotation and assuming everything else
constant, which of the following best describes this statement?
(A) A shift in the demand curves for both domestic and foreign automobiles
(B) A movement along the demand curves for both foreign and domestic automobiles
(C) A movement along the demand curve for domestic autos, and a shift in the demand curve for
toreign autos
(D) A shift in the demand curve for domestic autos, and a movement along the demand curve for
foreign autos
Explain why we say that not all giffen goods are inferior but not all inferior goods are inferior goods
Find an expression for the equilibrium quantities X and Y
