Economics Answers

1.Given the following demand equation P = 60- 2Q and the cost equation TC(q) = 100+3Q2

For the market of shoes

a.If the enterprises in this market take advantages of perfectly competitive market, find the equilibrium outputs and price.

b.If the seller in this market takes the advantages of pure monopoly, find the equilibrium outputs and price.

c.If the seller in this market takes the advantages of oligopolistic market, find the equilibrium outputs and price.

Acme tobacco is currently selling 5,000 pounds of pipe tobacco per year.Due to competitive pressures, the average price of a pipe declines from $15 to $12. As a result, the demand for Acme pipe tobacco increases to 6,000 pounds per year.

a) What is the cross elasticity of demand for pipes and pipe tobacco?

b) Assuming that the cross elasticity does not change, at what price of pipes would the demand for pipe tobacco be 3,000 pounds per year? Use $ 15 as the initial price of a pipe

Use a well labelled diagrams to show how production Isoquant can be used to explain:

1)Increasing returns to scale

2)Constant returns to scale

3)Decreasing return to scale

What does consumer surplus indicates?

What does a production frontier shows?

b) With proper examples draw a distinction between mathematical and econometric model?

For the given demand equation Qd=30-2p. Calculate the inverse of the demand equation, Average Revenue, Total Revenue and Marginal Revenue

b) You are trying to decide whether to take a vacation. Most of the costs of the vacation (airfare, hotel, and forgone wages) are measured in dollars, but the benefits of the vacation are psychological. How can you compare the benefits to the costs?

What happens to the demand curve of normal goods (draw an appropriate graph) in each of these cases?

a) The Bhutan population grows 0.5% in 2020?

b) An economy XYZ slides into recession in 2019, leading to a fall in real incomes

Explain, using a supply and demand graph, how a freeze in a vegetable crop will affect the equilibrium price and quantity.

Acme Tobacco is currently selling 5,000 pounds of pipe tobacco per year. Due to competitive pressures, the average price of a pipe declines from $15 to $12. As a result , the demand for Acme pipe tobacco increases to 6,000 pounds per year.

a) what is the cross elasticity of demand for pipes and pipe tobacco?

b) Assuming that the cross elasticity does not change, at what price of pipes would the demand for pipe tobacco be 3,000 pounds per year? Use $15 as the initial price of a pipe.