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(2) (a) What is product differentiation? In what market structure is this an essential feature? Briefly explain, at least, three different ways firms in this industry differentiate their products from those of other firms.
(b)Suppose a firm in this industry faces the following demand and total cost functions:
P = 5900 – 10Q
3 2
TC = 2Q - 4Q +140Q + 845.
Determine the profit maximizing output the firm should produce, the market clearing price and the total profit (if any) to be earned.
Suppose short run production function of a firm is given by Q = 600L2 - L where Q is the level of output and L is the number of labours employed.
a. Compute optimum labour use for a profit maximizing firm.
b. Over what range of labour does this firm experience increasing marginal product?
C. Over what range of labour does this firm experience diminishing marginal product?
d. Over what range of labour does this firm experience a negative marginal product?
4. Why is it important to try to determine the size of the fiscal policy multiplier?
If the fixed cost of manufacturing a product is ETB 10, 000 and the marginal cost at Q units of output is ETB(60+2.5Q). Find:
a. The function for the total cost of manufacturing x units.
b. The total cost of 200 units.
The marginal cost of a trader has been found to be MC = 3Q2 + 8Q + 400 . Determine the total variable cost of producing 100 units of the trade’s product.
How a cut in the budget of NSFAS would affect students learning in South Africa
5. Suppose an economy has an inflationary gap. How does the government’s actual budget deficit or surplus compare to the deficit or surplus it would have at potential output? 6. Suppose the president was given the authority to increase or decrease federal spending by as much as $100 billion in order to stabilize economic activity. Do you think this would tend to make the economy more or less stable? 7. Suppose the government increases purchases in an economy with a recessionary gap. How would this policy affect bond prices, interest rates, investment, net exports, real GDP, and the price level? Show your results graphically.
1. What is the difference between government expenditures and government purchases? How do the two variables differ in terms of their effect on GDP? 2. Federally funded student aid programs generally reduce benefits by $1 for every $1 that recipients earn. Do such programs represent government purchases or transfer payments? Are they automatic stabilizers? 3. Crowding out reduces the degree to which a change in government purchases influences the level of economic activity. Is it a form of automatic stabilizer? 4. Why is it important to try to determine the size of the fiscal policy multiplier?
The text describes several fiscal policy options to stabilize the economy: Changes in Government Purchases, Business Taxes, Income Taxes, and Transfer Payments. Based on what you’ve learned so far in the course, determine if the country you are living in currently needs economic stimulus or contraction. Describe how each policy option could specifically be used to change the national economy. Example: Country Z needs economic stimulus. The government could lower the business tax on buying new equipment. This would stimulate the economy because firms would have more money to invest which, in turn, increases demand in the equipment supply sector.
The following table provides the sources of electricity used by households in a city.
Source of Electricity (1) Percentage
Coal 39%
Hydro and Renewables 13%
Natural Gas 27%
Nuclear Pwer 19%
Other 2%
(a) Construct a pie chart.
(b) What percentage of power is derived from coal, nuclear power, or natural
gas?
(c) For above data, do you prefer using a pareto chart or a pie chart? Why?
#339914 on Dec 2023