Economics Answers

Suppose that two identical firms produce widgets and that they are the only firms in the

market. They have identical constant marginal costs equal to 30 and no fixed costs. Price

is determined by the following demand curve : P=150-Q where Q=Q1+Q2

a. Find the Cournot–Nash equilibrium outputs. Calculate the price and profit of

each firm in this equilibrium.

b. What is the market equilibrium price and quantity when each firm behaves as a

Bertrand duopolist choosing prices? What are firms’ profits?

c. If firm 1 is a leader and firm 2 is a follower, how will the outcome in (a)

changes?

d. Draw a table to compare price ,quantity and profit among the three oligopoly

models , perfect competition and monopoly model.

On the day his grandson was born, a man deposited with a trust company a sufficient amount of money so that the boy could receive five annual payments of P2,000 each starting with his 18th birthday. Interest at the rate of 9% per annum was to be paid on all amounts on deposit. There also was a provision that the grandson could elect to withdraw no annual payments and receive a sing lump amount on his 23rd birthday. The grandson chose this option. How much did the boy receive as the single payment?

P1,000,000.00 pesos is needed at the end of each year to maintain each building in Rizal Technological University in Mandaluyong. If money increases at 12% per annum in a investment, how much money need to invest directly so the local government of Mandaluyong can reduce the annual cost by P250,000? *

 If the price of one of the goods rises by 5 per cent, what will happen to the demand for the other good, holding other factors constant?

The demand function is Q = 200 - 5p, and the supply function is Q = -40 + 3p.determine the equilibrium price and quantity

Is there theoretically ever a situation in economics where accounting profit is equal to economic profit?

Explain the difference between efficiency and equity.

Elucidate the role of the government in enhancing efficiency and equity

Given Q=400-8P + 0.05Y. Where P=15 and Y=200. Fina the price elasticity of demand and income elasticity of demand

Consider the economy with the following data

𝐶 = 200 + 0.25(𝑌 − 𝑇)

𝐼 = 150 + 0.25𝑌 − 1000𝑟

𝐺 = 250

𝑇 = 200

(𝑀⁄𝑃)

= 2𝑌 − 100𝑟

𝑀 = 3200,

𝑃 = 2

a. Mathematically derive the IS-curve

b. Mathematically derive the LM-curve

c. Solve for the equilibrium income (Y) and interest rate (r)

d. Calculate the value of consumption (C) at the equilibrium level

e. Analyze effect that a monetary expansion will have on the equilibrium values for Output, Interest Rate, Consumption and Investment in the model.

Assume you are the Minister of Finance and need to raise revenue by choosing to tax a specific good, such as cigarettes or jewellery. Suppose that cigarettes have an inelastic demand, while jewellery has an elastic demand. Based on their elasticity, would you tax jewellery or cigarettes? Explain.