Economics Answers

Consider the general supply function:
Qs 5 60 1 5P 2 12PI 1 10F
where Qs 5 quantity supplied, P 5 price of the commodity, PI 5 price of a key input in
the production process, and F 5 number of firms producing the commodity.
a. Interpret the slope parameters on P, PI
, and F.
b. Derive the equation for the supply function when PI 5 $90 and F 5 20.
c. Sketch a graph of the supply function in part b. At what price does the supply curve
intersect the price axis? Give an interpretation of the price intercept of this supply
curve.
d. Using the supply function from part b, calculate the quantity supplied when the
price of the commodity is $300 and $500

Fatima, a college professor, derives satisfaction from her teaching performance (T) and her research output (R). Suppose that she can work up to 60 hours per week. Every hour spent on preparing the lecture notes improves T by 1 unit whereas every hour spent in the lab improves R by 2 units.

(a) Draw Fatima’s budget set in the T-R space.
(b) Suppose that the college has acquired new lab equipment worth £1000 that increases Fatima’s research productivity to 3 units per hour. Redraw her budget set.
(c) Consider the original scenario (no equipment). Now suppose that Fatima gets a grant for £1000. She could use it to buy the above-mentioned equipment or she could hire a teaching assistant who would improve her teaching productivity up to 1.5 units per hour. Redraw her budget set.
(d) If the lab is not open for more than 40 hours per week, re-draw Fatima’s budget set in part (a) above.

Refer to the figure below. It is efficient for this farmer to:

MC1 Q7

Question 29 options:

grow 750 bushels of wheat and 125 bushels of corn.


grow 250 bushels of wheat and 500 bushels of corn.


grow 1000 bushels of wheat and 250 bushels of corn.


grow 1000 bushels of wheat and 500 bushels of corn.

Describe the relationship between average tax rates and marginal tax rates for each of the three types of income tax. Which tax rate is generally relevant for someone who has to decide whether to take a job that is only slightly higher than their current job? Which tax rate is relevant for assessing the vertical justice of an income tax?

A Demand function is giving as: [D=25-2P].
Calculate the quantity demand.
(D)if the price of the product (P) is #6.00.

Suppose the total product (Q) is giving by the production functions; [q=4KL-0.5]
Where K= capital =12 and L= unit of labour -13.
Calculate the average product of labour

- Sept. 10 Mr. John transferred cash from his personal account to be used in the business,
- Birr 10,000.
- “ 10 Paid rent for the month, Birr 500
- “ 11 Purchased a truck for Birr 12,000 by paying Birr 3,000 Cash and giving a notes payable for the difference.
- “ 12 Purchased equipment on account Birr 1,460.
- “ 13 Purchased supplies on account Birr 240.
- “ 14 Paid insurance premiums of Birr 170 (Dr. prepaid insurance)
- “ 15 Received cash for services completed Birr 360.
- “ 16 Purchased Supplies on account Birr 240.
- “ 18 Paid salaries of Birr 900.
based on the data above Record the transactions in General Journal?

Use one sentence to explain how a consumer will maintain his/her welfare (after consuming one commodity) if the marginal utility is less than the price of the commodity

Demand for the government to provide a clean and safe environment for fishing on a lake is

Suppose there are only two individuals in the market for some product. Individual A’s inverse demand equation is P = 8 - 0.5 QD and B’s inverse demand equation is P = 10 - QD

a) Derive the equation showing A’s quantity demanded as a function of price. Ie: A’s demand equation

b) Derive B’s demand equation

c) Derive the aggregate (market) inverse demand equation. Ie: the equation showing price as a function of aggregate demand

d) Derive the aggregate (market) demand equation