Economics Answers

The market demand functions in a competitive industry is represented by industry, have identical cost function:

C=Q-Q2+0.5Q3 where C is the cost of a firm and q is the quantity produced by each. Calculate;

i) The output produced by each firm in the long run. (5 Marks)

ii) The longrun equilibrium price. (5 Marks)

iii) The equilibrium number of firms. (5 Marks)

iv) Write short notes on indifferences curves. 

There are 300 identical firms in a perfectly competitive market, the price of the output is p, the short-run cost function of a typical firm in the market is as follows:

 C(q)=q³ - 2q² + 2q+ 10

1. What is this firm’s (short run) average variable cost function?
2. What is this firm’s (short-run) supply function?
3. If p = 17, what is this firm’s maximum profit?
4. If p = 17, what is this firm’s producer surplus?
5. What is the short-run market supply function?
6. If the market demand function is D = 500- 50 √3p-2, what is the short-run market equilibrium price and market equilibrium output quantity?
7. What is the output level and the profit of a typical firm at the market equilibrium from (g)?

1.     What would the expenditure multiplier be in an econ[1]omy without government spending or taxes where the MPC is 0.8 and the MPm is 0? Where the MPm is 0.1? Where the MPm is 0.9? Explain why the multiplier might even be less than 1. 

If the consumers income rises from rs 10000 to 12000. As a result demand for goods increases from 20 units to 30 units per week. Find the income elasticity of demand per goods

1. The Superfund program uses strict liability and joint and several liability with respect to clean up costs. Explain why this system of liability is likely to result in the underreporting of toxic waste disposal sites. (25 points)

2. Summarize what is meant by the pollution haven hypothesis. Why might it be difficult to prove the existence of this theory? (10 points)

3. Empirical evidence does not consistently support the environmental Kuznets curve. What does this suggest about the tradeoff between economic growth and environmental degradation? (5 points)

Let x={1,3,5} and you= {2, 4,6,} . Find XUY and the cartesian product of X and Y.

Increase in net capital inflow will increase interest rates in the domestic loanable funds

market” – do you agree with this statement? Explain by drawing a diagram and

comment how you think investment will change if there is an increase in capital inflow.

When a cold snap hits Florida, the price of orange juice rises in supermarkets throughout the country.

“Since both the demand and the supply for the good are very blank, I am confident

that prices will change very little no matter what happens.”

A consumer has the following utility function for good X and good Y 

𝑈 = 4𝑋 + 8𝑌 

The consumer’s income is KShs 12,000, the price of good X is KShs 300 and the price of good Y is KShs 500. 

Required: 

(i) What type of preferences do the two goods represent? Explain  (ii) Compute the marginal rate of substitution of the two goods  (iii) Calculate the corresponding consumer demand functions