Economics Answers

 Please explain why the risk-averse customers purchase insurance. (1 point)

 Please draw a graph to show their risk premium. (1 point)

Afghanistan reported its first COVID-19 case on February 24, 2020. As the infection spread, the government tightened containment measures, including introducing screening at ports of entry, quarantine for infected people, and closure of public places for gathering. In May, it waived electricity bills of less than Af 1,000 (US$13) for a family residence in Kabul for two months. The decision benefited more than 1.5 million Kabul residents.

 Please draw a graph using budget line and indifference curve to indicate the subsitution effects and income effects for the families in Afghanistan after the government waived electricity bills. Assumed that there are two goods: electricity and other goods and services.

(2 points)

 Shortly explain if the electricity is normal goods or inferior goods. (1 point); and the sign of total effects is negative or positive? (1 point)

What is explicit cost

Which one of the following is a microeconomic issue?

1. The rate of economic growth in Japan.
2. The South African inflation rate.
3. The price of maize in Lesotho.
4. The unemployment rate in Zimbabwe.
5. The total production of goods and services in Zambia.

A normative statement is a statement regarding

Discuss the circumstance where fiscal expansion leads to full crowding out

An increase in demand for notebook raises the quantity of notebooks demandes but not the quantity supplies is the statement true or false? Explain.

Suppose marginal utility of good X is 20 while its price is Rs. 4 per unit and marginal utility of

Y good is 50 while its price is Rs.5 per unit .The individual to whom this information applies is

spending 20 on each good .Is he maximizing his satisfaction.?

Suppose marginal utility of good X is 20 while its price is Rs. 4 per unit and marginal utility of Y good is 50 while its price is Rs.5 per unit .The individual to whom this information applies is spending 20 on each good .Is he maximizing his satisfaction.?

(3) Elasticity of Demand

For the linear demand p the demand is: = 13 0.05q, please find the price interval in which -

a Elastie

b) Inelastic

Unit elastic

d) Explain intuitively the meaning of increasing revenue on interval for which demand is elastic and decreasing revenue on interval for which demand is inelastic (50-100 words) (20 points)