Economics Answers

suppose the shortrun market price a competitive firm faces is birr 9 and the total cost of the firm is tc-200+q+0.02qanswer the quetions follow

a)calculate the short run equilibrium out put and profit of the firm

b)drive the mc atc and avc

The market for commodity X is described by the following demand and supply curves.

                                         2

                  Q(p) = 25 – P   ………………(1)

                  Q(p) = -3 + 3P ………………(2)

(a)   Which of the two curves is the demand curve and which is the supply curve? How did you know?

(b)  Graph both curves (on the same graph)and find the equilibrium price and the equilibrium quantity transacted.

(c)   Solve algebraically for the equilibrium values in part (b).

(d)  Find the price elasticity of demand at equilibrium and interpret your result.

The estimated regression of Y on X1, X2, and X3 using a sample of 30 observations, 

gave the following results:

Yt = 2.4 + 3.9X1 + 0.65X2 – 1.46X3

(1.0)

(1.50 (0.40) (0.61)

Adjusted R2 = 0.67

Figures in parenthesis are standard errors of estimates.

a) Asses the statistical quality of the model.

A monopoly firm faces a demand curve given by the following equation: P = $500 − 10Q, where Q

equals quantity sold per day. Its marginal cost curve is MC = $100 per day. Assume that the firm faces

no fixed cost. You may wish to arrive at the answers mathematically, or by using a graph (the graph is

not required to be presented), either way, please provide a brief description of how you arrived at your

results.

In a country for the year 2019, the minimum consumption level is Rs. 200 and the MPC is .80, the investment is Rs. 250 crores while Government expenditure is Rs. 200 crores. The Government is imposing tax at the rate of 10% of income. Find the equilibrium level of income in the economy and also the amount of consumption, saving and taxes.

A firm’s production can be described with the following production function q = 6L2 -L3 + 20L, the amount of capital is fixed at 3 units and the total revenues are given by TR = 5q. Labour supply that the firm faces is given by the function w = 100.

• Decide whether the company is a perfect or imperfect competitor in the output market.

• Decide whether the company is a perfect or imperfect competitor in the labour market.

• Express the function MRPL , ARPL , MFCL , and AFCL .

• Determine how employees the firm is willing to employ. Next, determine the wage rate that the firm will pay for each unit of labour.

Write a detailed note on management of fiscal federalism in Nigeria

A heat exchanger is being installed as part of a plant modernization program. It costs $80,000, including

installation, and is expected to reduce the overall plant fuel cost by $20,000 per year. Estimates of the

useful life of the heat exchanger range from an optimistic 12 years to a pessimistic 4 years. The most

likely value is 5 years. Assume the heat exchanger has no salvage value at the end of its useful life.

Determine the pessimistic, most likely, and optimistic rates of return.

Many governments directly regulate monopolies, especially those created by the government, such as public utilities (for example, water, natural gas, or electricity distribution), to reduce monopolies' mar ket power. If the marginal cost of production for a monopoly is constant, there are no fixed costs and the market demand curve is linear, draw a graph indicating the socially optimal amount of regulation. Now suppose the government sets a price ceiling that is above the socially optimal level, but below the monopoly's profit-maximizing price. How do the price, quantity, and welfare under this regulation compare to those under optimal regulation?

1. Can a firm be a natural monopoly if it has a U-shaped average cost curve? Why or why not?

2. Can a firm operating in the upward-sloping portion of its average cost curve be a natural monopoly? Explain.

3. In the Application "The Botox Patent Monopoly," what would happen to the equilibrium price and quantity if the government had collected a specific tax of $75 per vial of Botox? What welfare effects would such a tax have?