Economics Answers

The monopoly firm has two consumers: Ali and Javad. Both have different demand equations. Ali's demand equation Q = 100-P; Javad's Demand equation Q = 120-P. The marginal cost of the firm is 20 manat. Using two-tier pricing, the firm has set a marginal cost per user and an additional 30 manat. Calculate the firm's profit and total profit for each consumer

Assume that the daily demand for ice-cream is Q = 500 (P - 2) and Q = 11 000 - 1,000P. If the maximum sale price of ice cream is $ 4, how much will be the, producer and consumer profit ?

Suppose a firm uses two variable inputs: L and K. Initially employs K=15 units and L=5units; and produced, Q=3005 units denoted by an Isoquant curve. Assuming Marginal Product of L, MPL=6 units and MPK=18, answer the following question.
A. Determine the economically efficiant level of labor and captital that maximizes profit.

B. If the firm reduces the eployment by 10, by how much L has to be increased to keep the level of output constant on the isoquant.

A short run production function with single variable factor-Labor(L), given as follows: Q=60L²-2K³, then answer the following questions
A. Determined the level of lobor and capital which gives the maximum possible output
B. Compute Labor employment that corresponding with the maximum possible MPL and APL

Suppose that there are only two fishermen, Zach and Jacob, who fish along a certain coast. They would each benefit if lighthouses were built along the coast where they fish. The mar-ginal cost of building each additional lighthouse is $100. The marginal benefit to Zach of each additional lighthouse is 90 – Q, and the marginal benefit to Jacob is 40-Q, where Q equals the number of lighthouses.
a) Explain why we might not expect to find the efficient number of lighthouses along the coast.
b) What is the efficient number of lighthouses? What would be the net benefits to Zach and Jacob if the efficient number were provided?

What is production possibility curve?explain its main features?

The Bonds of Corporation Y are trading at £89.92, have a 20 year maturity date, a nominal value of £100 and pay an annual coupon of 9 percent. What is the yield to maturity of these bonds?

A company is negotiating today a long term loan of £40 million, the interest rate on the loan will be 7% and the loan will be repaid in 6 equal instalments, with the first instalment being due at the end of year two. Interest will be charged on the outstanding balance of the loan and will be accumulated for the first year when no re-payment will be made. What is the annual instalment required?

Assume that there are increasing returns to scale; when the production is increased, the long-run average cost is? The demand for a product is said to be price elastic when? For a price inelastic good, when the price increases, this means?