Search & Filtering
1. Explain how the law of supply works and how it is connected to the incentive for profit. (NOTE: This
includes the effects of price on production and number of suppliers.)
2. Explain what a supply schedule and a supply curve are and how they are used.
3. What is elasticity of supply and how does time affect it?
sec. 5: Costs of Production, pp. 91-97
4. How is the concept of marginal returns used to determine labor needs?
5. Explain how variable, fixed, total, and marginal costs are related.
6. Explain how marginal revenue and marginal costs are used to set output.
7. Examine how operating costs factor into the decision to keep a company or factory open.
sec. 6: Changes in Supply, pp. 98-108
8. Explain the difference between price determinants and non-price determinants as factors that cause a
change, or shift, in supply?
what will be the change in paul’s demand for good x if the price of good falls to £4?
Your utility function for apples and bananas is U(A,B) = A4 B4 , where pA = pB = 1 (in £
per unit) initially.
- (a) If your exogenous income is m = 100 (in £), then find the optimal consumption of apples and bananas, A∗ and B∗, respectively, as well as the maximised level of utility,U(A∗,B∗).
- (b) If now p′A = 2, then find the new optimal consumption bundle, (A∗∗, B∗∗), along with the maximised utility level, U(A∗∗,B∗∗).
- (c) How much should income be increased by in part (b) so that the maximised utility level of part (a) is just attainable?
Price of Basket balls: AED2,4,6,8,10
QD: 10, 8, 6,4,2
QS: 2,4,6,8,10
If our products hit the market for sale at AED 4, what market situation will be present? what is the size of shortage/surplus?
B. If price of basketball increases to AED8, what market situation will be present? explain in detail.
