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Does competition exist in perfectly competitive market?
Possibility Cars (hundreds) Bicycles (hundreds)
A 15 0
B 11 5
C 8 7
D 5 9
E 0 11
Determine the opportunity cost of additional production at different outputs.
Determine which particular combination(s) is most efficient
A 15 0
B 11 5
C 8 7
D 5 9
E 0 11
Determine the opportunity cost of additional production at different outputs.
Determine which particular combination(s) is most efficient
Economics
suppose, you want to buy a book for Rs.50 some food for Rs. 50, an ice cream costing Rs.50, an utensil for your mother costing Rs.50 and you have Rs.100 with you. What problem you have to face in this example? state the see reasons of this problem.
Assume an economy can be represented by Y = 10 + 0.8×C + G, where Y is income (GDP), G is government spending and C is consumption. If G was to rise from 100 to 200 by how much would the equilibrium value of Y increase?
a. 500 b. 80 c. 100 d. 200
a. 500 b. 80 c. 100 d. 200
7. Which of the following characterizes both perfectly competitive and monopolistically competitive markets?
a. Firms face downward sloping demand curves
b. Firms sell differentiated products
c. Firms use advertising extensively
d. In the long-run equilibrium, firms earn zero economic profit
9. Coase Theorem claims that the market can internalize externalities provided:
a. Markets are perfectly competitive
b. Transaction costs are zero, irrespective of how property rights are defined
c. Property rights are well-defined, irrespective of the transaction costs
d. Property rights are well-defined and transaction costs are zero
11. If the nominal interest rate is 10% and the price index rises from 200 to 210, what is the value of the real interest rate?
a. 0%
b. 20%
c. 15%
d. 5%.
a. Firms face downward sloping demand curves
b. Firms sell differentiated products
c. Firms use advertising extensively
d. In the long-run equilibrium, firms earn zero economic profit
9. Coase Theorem claims that the market can internalize externalities provided:
a. Markets are perfectly competitive
b. Transaction costs are zero, irrespective of how property rights are defined
c. Property rights are well-defined, irrespective of the transaction costs
d. Property rights are well-defined and transaction costs are zero
11. If the nominal interest rate is 10% and the price index rises from 200 to 210, what is the value of the real interest rate?
a. 0%
b. 20%
c. 15%
d. 5%.
Economics
Suppose in autarchy that Midland and Zeeland have the following price ratios for Chicken (C) and Noodles (N).
Midland: Pc/Pn = 4/1
Zeeland: Pc/Pn = 1/2
1. What is the range of relative prices for which Zeeland willingly specializes in and exports chicken?
2. What is the range of relative prices for which Midland willingly specializes in and exports Noodles?
3. What is the range of prices for which both 1 and 2 is true?
4. Assume a relative price within the range given in 3 and graphically show each of the following for Midland. Assume that Midland and Zeeland have increasing opportunity costs.
a) Autarchy equilibrium. Label it A.
b) The production point after trade. Label it P.
c) The consumption point after trade. Label it C.
d) Exports. Show the distance.
e) Imports. Show the distance.
f) Gains from trade.
Midland: Pc/Pn = 4/1
Zeeland: Pc/Pn = 1/2
1. What is the range of relative prices for which Zeeland willingly specializes in and exports chicken?
2. What is the range of relative prices for which Midland willingly specializes in and exports Noodles?
3. What is the range of prices for which both 1 and 2 is true?
4. Assume a relative price within the range given in 3 and graphically show each of the following for Midland. Assume that Midland and Zeeland have increasing opportunity costs.
a) Autarchy equilibrium. Label it A.
b) The production point after trade. Label it P.
c) The consumption point after trade. Label it C.
d) Exports. Show the distance.
e) Imports. Show the distance.
f) Gains from trade.
Given the following information:
P = 20 – 2Q
MC = AC = 4
a) Determine the profit-maximizing output and price charged by a monopolist.
b) Determine the competitive price and output.
P = 20 – 2Q
MC = AC = 4
a) Determine the profit-maximizing output and price charged by a monopolist.
b) Determine the competitive price and output.
What is the welfare impact of a subsidy policy?
Select one
a. Producer surplus increases, consumer surplus declines, and total welfare declines.
b. Producer and consumer surplus increase, and these gains are larger than the government cost.
c. Producer and consumer surplus increase, and these gains are smaller than the government cost.
d. Producer surplus increases, consumer surplus declines, and total welfare increases due to the subsidy program.
Select one
a. Producer surplus increases, consumer surplus declines, and total welfare declines.
b. Producer and consumer surplus increase, and these gains are larger than the government cost.
c. Producer and consumer surplus increase, and these gains are smaller than the government cost.
d. Producer surplus increases, consumer surplus declines, and total welfare increases due to the subsidy program.
A logarithmic variable cost function implies that, select one
a. marginal cost is increasing at a decreasing rate.
b. marginal cost is increasing at an increasing rate.
c. marginal cost is constant.
d. marginal cost is decreasing as quantity increases.
a. marginal cost is increasing at a decreasing rate.
b. marginal cost is increasing at an increasing rate.
c. marginal cost is constant.
d. marginal cost is decreasing as quantity increases.
Problem 1. You are given the following data about the economy GDP=6000
YD = 5100
Government deficit = G –T = 200
C = 3800 NX = - 100
Find government expenditure (G), Investment (I), Private Savings (SH ) Note: YD is disposable income
Problem 2. You are given the following data about the economy GDP=6000
IG =800
IN =200
C=4000
G=1100
Government surplus=30
Find net domestic product (NDP), net exports, private savings and depreciation Note: IN are net investments (gros investments net of the depreciation)
Problem 3. Consider a closed economy with expenditure totals given by: C = 1200
I = 400
G = 300
F = 200 (transfers) T=400
a) What is GDP?
b) What is private saving?
c) What is public saving?
d) What is total saving? Show that it equals investment.
Problem 4. Now suppose that the economy from Problem 3 is an open one and that NX=-100. Answer questions a-c. Replace question d) by:
d’) We can define Sr=-NX as the rest of world saving. What is total saving now? Show that it equals investment.
YD = 5100
Government deficit = G –T = 200
C = 3800 NX = - 100
Find government expenditure (G), Investment (I), Private Savings (SH ) Note: YD is disposable income
Problem 2. You are given the following data about the economy GDP=6000
IG =800
IN =200
C=4000
G=1100
Government surplus=30
Find net domestic product (NDP), net exports, private savings and depreciation Note: IN are net investments (gros investments net of the depreciation)
Problem 3. Consider a closed economy with expenditure totals given by: C = 1200
I = 400
G = 300
F = 200 (transfers) T=400
a) What is GDP?
b) What is private saving?
c) What is public saving?
d) What is total saving? Show that it equals investment.
Problem 4. Now suppose that the economy from Problem 3 is an open one and that NX=-100. Answer questions a-c. Replace question d) by:
d’) We can define Sr=-NX as the rest of world saving. What is total saving now? Show that it equals investment.
