Principles of Home Microeconomics

Principles of Home MicroeconomicsDate due 1. Every day, Ivan buys 2 cups of coffee and a sandwich for lunch. The price of coffee is $2 per cup and the price of a sandwich is $5. Ivan’s choice of lunch maximizes his utility and he spends only $9 on lunch. Compare Ivan’s marginal utility for coffee and his marginal utility from the sandwich.For Ivan to take two cups of coffee, then the marginal utility of the first glass of coffee must exceed $2, while the marginal utility of second glass equals $2. Ivan’s marginal utility of sandwich is $5. Therefore, Ivan attaches a higher utility to sandwich than the second glass of coffee. however, the first glass of coffee might have provided a higher utility.2. Newspaper vending machines are designed so that once you have paid for one paper you have access to all the papers in the machine and could take multiple papers at a time. However, other vending machines dispense only one item (the item you bought). You do not have access to all the goods (sodas, candy, snacks, etc.) at one time. Using the concept of marginal utility, explain why these vending machines differ? News papers are mutually exclusive, once the first paper is picked. the marginal utility of picking a second paper is almost zero. Note that the news found in the second newspaper picked are the same as the first newspaper hence picking the second paper constitutes negligible utility gain hence no need for restriction. However, customers will always have an incentive to pick different goods from the other vending machines since every second good picked has a utility gain, hence the restriction. For instance a combination of soda and snacks yield to a higher utility than soda alone. 3. Briefly explain the relevant portions shown in a backward sloping labor supply curve. How are the various possibilities derived?Contrary to the normal supply curve, labor supply curve is not purely positively sloped, but bends backwards changing to negative slope at higher wages. This is due to contradicting forces of substation effect and income effects as wage rises. Workers substitute working hours to leisure. Wage rise increases the incentive to work hence positive substitution effect. On the other hand, increase in wage implies that workers can achieve their target income by working less hours hence the negative income effect. At low wages, substitution effect is more than income affects hence the total effect s positive. However, as wages rise, income effect increases and at a certain point the total effect becomes zero, then negative, hence the backward turn. 4. The financial advisor Andrew Tobias described an incident that occurred when he was a student at the Harvard Business School: Each student in the class was given a large amount of information about a particular firm and asked to determine a pricing strategy for the firm. Most of the students spent hours preparing their answers and came to class carrying many sheets of paper with their calculations. Tobias came up with the answer after just a few minutes and without having made any calculations. When his professor called on him in class for an answer, Tobias stated, The case said the XYZ Company was in a very competitive industry…and the case said that it had all the business it could handle. Given this information, what price do you think Tobias argued the company should charge? Briefly explain. [Tobias says the class greeted his answer with thunderous applause.] XYZ Company took the prevailing market price. Note that XYZ operated in a competitive market environment and thus had no power to change prices. With many sellers and buyers as well as perfect information flow, then any price above or below market price would result to zero sales. 5. Edward Scahill produced table lamps in a perfectly competitive desk lamp market. a. Fill in the missing variables in the following table: Output per WeekTotal CostTotal Fixed CostTotal Variable CostAFCAVCATCMC0$1001000—-11501005010050150-2175100755038.588.52531901009033.333063.331542101001102527.552.510524010014020284830628010018016.673046.6740733010023014.2932.8647.1550839010029012.536.2548.7560946010036011.114051.11701054010044010445480b. Suppose that the equilibrium price in the desk lamp market is $50. How many table lamps should Scahill produce, and how much profit will he make. In a competitive market, maximum profit is attained when Price = Marginal cost Thus Q* = 7Profit = (price * quantity) – Total cost = TR –TC = (50 *7) – 330 = $20c. If next week the equilibrium price of desk lamps drops to $30, should Scahill shut down? Explain. At a price of $30, optimal Q= 5(where P=MC). Maximum Profit attainable = 30*5 – 210 = -60 The firm should shut down since the market price is too low to cover production costs. 6. Suppose an assistant professor of economics is earning a salary of $75,000 per year. One day she quits her job, sells $100,000 worth of bonds that had been earning 5 percent per year, and uses the funds to open a bookstore. At the end of the year, she shows an accounting profit of $90,000 on her income tax return. What is her economic profit? Economic profit = accounting profit – opportunity cost Opportunity costs = $75000 (salary forgone) + 5% * $100,000 (bond interest forgone) = $80,000Economic profit = 90000-80000 = $10,0007. Briefly explain why monopolists are not allocatively efficient and briefly describe what results from these circumstances.Being a single producer, monopolists restrict quantity to attract higher prices. This is made possible by the negative relationship between quantity demanded and price. Monopolists MR curve is twice as steep as the AR(demand) curve, therefore at equilibrium quantity (where MC=MR), consumers are willing to pay a price higher than MR resulting economic profits. Consumer surplus is significantly reduced. 8. Briefly discuss the Herfindahl-Hirschman Index (HHI), including an explanation of what it is used for and how it is calculated. HHI conventionally accepted measure of market concentration. Literally, HHI refers to the summation of squares of market shares of all firms existing in a particular market. A low HHI signifies high degree of market concentration. Notably, in market characterized by many suppliers, with each having a market share approximately equal to zero, the summations of squares will also be close to zero and hence the market will be close to perfect competition structure. A monopoly will have an HHI of 10,000 (i.e. 100%2)Work citedMankiw, N G. Principles of Economics. Mason, OH: South-Western Cengage Learning, 2009. Print

The Major Importance of Economics

The mentioned book of Smith has been divided into four parts. consumption, production, exchange and distribution of wealth. He came up with an opinion that the wealth, goods and service are produced in every country in accordance with some laws. Concerning the exchange and with regard to the distribution of wealth, he developed some laws for mutual exchange and with regard to the distribution of wealth.Here we only concerned with the microeconomics and will analyze the topics which come under the umbrella of microeconomics. Let’s have a glance over the microeconomics to get an idea of what is microeconomics is all about?Microeconomics is the branch of economics which deals with the behavior of individual entities such as market, firms and households. Analysis of market mechanism that establishes relative prices among the goods and the services is one of the primary goals of microeconomics. The two words micro economics mean the millionth part. We are here concerned with the small part of a country’s economy if we are about to learn microeconomics. We have to assume full employment and the average price level is fixed while studying microeconomics. Macroeconomics analyzes the market behavior of individuals and firms to understand the decision-making process of firms and consumers. The connection between the individual buyers and sellers is amply elaborated in microeconomics, it focuses on the basic theories of supply and demand and seeks the answers of certain questions like, how much to produce and how much to charge it? And what is the right time to penetrate the market in perfect competition? We will go into the details of supply and demand after capturing an idea about the perfect market competition.A market has an enormous number of buyers and sellers present in it who penetrate in the market with the same intentions and set of minds which is to facilitate the customers and to create a surplus.

Corporate governance in the GCC

By doing this, it also provides the structure, through which the company objectives are set and the means of attaining those objectives and monitoring performance (Baydoun, Ryan and Willett, n.d., p. 2). The practice of financial reporting and auditing standards are considered as an integral part of good governance. In the literature review, it has been argued that the managers need to think beyond the belief that mismanagement in the microeconomics policies lead to poor corporate governance, and then only they will succeed in designing a holistic and systematic corporate governance model. Many of the researchers have emphasized on the creation of situation specific corporate governance structure, which has created difficulties in finding one universal definition of corporate governance. Some other sets of researcher have emphasized on the relational aspect between the managers and the shareholders. Some researchers have revealed that corporate governance is different from management, where management only looks at successful running of the organization but corporate governance looks at conducting the operations of the organization in a proper and transparent manner. Different tools like controlling and accountability can be incorporated by the business leaders in the management, for monitoring the activities of the agent and motivating them, so that they can act in accordance with the expectations of the external and internal stakeholders. The organizations should accept certain set of corporate values otherwise, there might be some possibilities that the employees might act according to their own interest. Moreover, for creating an environment of knowledge sharing, the board members must create a knowledge sharing environment inside the organization in order to fill up the scope for implementing corporate governance. Various research scholars have stated various principles for corporate governance, which can be summarized as an obligation for the organization to maximize the value of the shareholders. The literature review has discussed about various theories proposed by the research scholars, like the inherent property right theory, stewardship theory, principal-agent model (finance model) and myopic market model etc that discussed about the major issues related to the shareholder-oriented corporate governance. The literature review has also evaluated the principles and enactment that are followed by different countries and have summarized them to indentify the major areas of Corporate Governance, such as board constitution, board remuneration, auditor’s remuneration and responsibilities, transparency in disclosures, stakeholder and shareholder information and influence of ownership structure. However, it has been emphasized that there is no such singular model of corporate governance that is followed by every country. Due to difference in time zone and orientation, there is difference in corporate governance policies of different countries. In this context, there are several issues related to the corporate governance structure that have been identified. Then empirical research studies related to corporate governance has been analyzed and found that in most of the countries benefits and


Units of

of workers

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Average costs ($)
28). As the firm in the above graph expands from plant size #1 to plant size #3, it experiences:
A) diminishing returns. B) economies of scale. C) diseconomies of scale. D) constant costs.

Confused About

The WipeOut Ski Company manufactures skis for beginners. Fixed costs are $10. Sales revenue is
$20 per unit. Fill in the table as much as is useful. Calculate profits and answer the following
questions 1-7
1. What is the total cost for an output of 4 units?
a) 0
e) none of the above
2. What is the Average variable cost for an output of 2 units?
a) 0
b) 14
e) none of the above
3. What is the profit for an output of 1 units?
a) -10
b) -5
C) 0
d) 5
e) 10
4. What is WipeOut’s profit maximizing output in the short run?
a) 0
b) 1
C) 2
d) 3
e) 4
A new competitor entered the market using a better production method that allows them to undercut
the current market price. The price falls to $15 per unit.
5. What is WipeOut’s profit maximizing output in the short run?
a) 0
b) 1
c) 2
d) 3
e) 4
6. What is Wipe Out’s profit maximizing output in the long run?
a) 0
b) 1
c) 2
d) 3
e) 4
7. Due to this competition, Ceteris Paribus, consumer surplus
a) increases b) decreases c) stays the same d) cannot be determined e) it’s not quot;equot;!Microeconomics

3 Suppose A Monopolist Faces A Demand Curve P = 40 Q

The monopolist’s Total Cost function is given by TC =To maximize becofit , A monopolist set price and quantity where
Marginal revenue equals to Marginal cost
given MC = 4+ 2 Q
and demand curve = P = 40 – Q
So, find me that is first derivative of…Microeconomics

Hello There Kindly Find A Screen Shot Of A Question For Microeconomics Concerning International Trade Supply And

2) The North American Free Trade Agreement (NAFTA), signed in 1994, reduced trade
barriers between the United States, Canada, and Mexico. During the 2016 presidential
campaign, several prominent candidates from both parties denounced NAFTA as having
had a negative impact on jobs in the United States. In particular, they cited the impact on
manufacturing jobs.
a. In what ways might free trade agreements have a negative impact on jobs in the
US? Briefly explain. Is it possible that free trade agreements could have a
positive impact on jobs in the US? Briefly explain. (2 points) b. Income inequality has increased in the United States over the past several
decades. What role might increased international trade have on this increase? (2
points) Microeconomics

Hello I Was Just Wondering About How The Cost Of Labour And Capital In The Following Question Factor Into

The following data show the total output for a firm when different amounts of labour are combined with a fixed amount of capital.
Assume that the wage per unit of labour is $10 and the cost of the capital is $50.
Labour per period
Total output per period
5) Refer to Table 7-3. The average total cost when producing 150 units of output is approximately
A) 40 cents.
B) 67 cents.
C) $1.50.
D) 80 cents.
E) 33 cents.Microeconomics

In A Market Based Economy What Is The Role Of Prices Transmitters/Signals? How Do Prices Guide Economic Decisions


In a market based economy what is the role of prices transmitters/signals? How do prices guide economic decisions

and allocated scarce resources? Explain the role prices play in balancing supply and demand for goods and services. Provide commentary and graphical analysis. Does the concept of opportunity cost play a role in the determination of prices?


Use The Graph Below To Answer The Following Questions A)

At 200 units of the activity,


Use the graph below to answer the following questions:

a) At 200 units of the activity,

marginal benefit is $__________ and marginal cost is $__________.

b) Adding the 200th unit of the activity causes net benefit to __________ (increase, decrease) by $__________.

c) At 700 units of the activity, marginal benefit is $__________ and marginal cost is $__________.

d) Subtracting the 700th unit of the activity causes net benefit to __________ (increase, decrease) by $__________.

e) The optimal level of the activity is __________units. At the optimal level of the activity, marginal benefit is $__________ and marginal cost is $__________.


4 You Just Purchased An Existing Business That Produces Solar Panels According To The Following Production


4. You just purchased an existing business that produces solar panels according to the following production

function: Q=K0.5L0.5. The business currently has 25 units of capital, which cost $1 each, and no workers. Your first order of business is to hire workers and begin production. Workers can be hired for $1 each. The market price for the panels that you produce just fell to $100. How much profit, if any, will you make if you produce solar panels given the existing capacity (short run)?


A Perfectly Price Discriminating Monopolist Has Constant Marginal Cost 20

Equivalently, TC(Q)=20Q.The


A perfectly price discriminating monopolist has constant marginal cost 20 . Equivalently, TC(Q)=20Q. The

monopolist faces a demand curve P(Q)=150-2Q.

The monopolist produces quantity Q=

Producer surplus is PS(Q)=

Consumer surplus is CS(Q)=

Deadweight loss is DWL(Q)=


Cocacola Has Been Focusing On Selling More 7 5ounce (222 Ml) Cans In Displays Near Supermarket Checkout Lines


Coca-Cola has been focusing on selling more 7.5-ounce (222 ml) cans in displays near supermarket checkout lines.

Previously, Coke had relied more heavily on 20-ounce (592 ml) bottles displayed in the beverage sections of supermarkets. An article in the Wall Street Journal noted that, The smaller 7.5 ounce mini-cans are typically priced at five to seven cents an ounce, compared with three or four cents an ounce for 12-ounce cans. It quoted a Coca-Cola executive as arguing that consumers don’t care about the price. They will pick it up if you put Coke within arm’s reach.


Ease Answer Questions

2a through2f. Please show your calculations and your work. Consider the following table


ease answer questions 2 a through 2f. Please show your calculations and your work. Consider the following table

below. Joe and Catherineproduce any of the following combinations of cookies and pies.

Joe Catherine

Cookies Pies Cookies Pies

0 30 0 20

10 24 10 16

20 18 20 12

30 12 30 8

40 6 40 4

50 0 50 0

2a. What is the opportunity cost to Joe forproducing one pie?

2b. What is the opportunity cost to Joe for producing one cookie?

2c. What is the opportunity cost to Catherine for producing one pie?

2d. What is the opportunity cost to Catherine for producing one cookie?

2e. Who has a comparative advantage in the production of pies? Who has a comparative advantage in the production of cookies?

2f. Explain why Joe and Catherine can be made better off through specialization and trade.


If A Firm Is Willing To Supply The 1 000th Unit Of A Good At A Price Of $23 Or More We Know That $23 Is


If a firm is willing to supply the 1,000th unit of a good at a price of $23 or more, we know that $23 is


Group of answer choices

only price for which the seller is willing to sell this unit of the good.

highest price the seller hopes to realize for this output.

minimum price the seller must receive to produce this unit.

price that sets the marginal benefit equal to the price.

average price of all the prices the seller could charge.


When A Firm Discovers A New Pharmaceutical Drug It Will Have A Patent What Will Happen To The Price Of The Drug


When a firm discovers a new pharmaceutical drug, it will have a patent. What will happen to the price of the drug

when the patent runs out, and why?

Select one:

a. Decreases, as the market becomes more competitive, the price falls to equal marginal cost.

b. Decreases, because the demand for the drug decreases as people have now mostly been cured.

c. Remains the same, because the patients get the same drug.

d. Increases, because the demand for the drug increases.


Where Are The Inflection Points On The Production Curves (Marginal Product Of Labor Curve And Average Product Of


Where are the inflection points on the production curves (marginal product of labor curve and average product of

labor curve) and cost curves (marginal cost curve and average variable cost curve) of a firm in the short run? I understand that there is an inflection point on the total product of labor curve (TPL) which corresponds to the maximum point of the marginal product of labor curve (MPL) but not for other curves.


For The Question Below I Don’T Understand Why Clause 3 Is True When The Firm Is Producing Its Last Unit


For the question below, I don’t understand why clause 3 is true. When the firm is producing its last unit,

shouldn’t the marginal cost still vary since the two curves have different slopes?

For the following question, use the graph below.
i- – – -.
– – – -i- – – – – –
-i- –
Firm A
– – – – – — —
Firm B
1000 1200 Quantity
(/16) The individual supply curves for Firm A and Firm B are shown in the above graph. If the
market price for the good is $5 per unit, which of the following would be TRUE?
Collectively, these two firms would produce 1,400 units.
Firm B will receive a greater amount of producer surplus than Firm A.
The marginal cost of the last unit produced will be the same for both Firm A and Firm B.
a .
I and II only.
The marginal cost of the 200quot; unit produced will be greater for Firm A.than for Firm B.
b. II and IV only.
c. I and III only.
d. I, III, and IV only.
I, II, III, and IV.Microeconomics

A Pet Shop Operates In A Perfectly Competitive Industry The Firm Is Currently Producing At A Point Where Market


A Pet shop operates in a perfectly competitive industry. The firm is currently producing at a point where market

price equals its marginal cost. The Pet Shop’s total revenue is currently below total variable cost. You should advise this firm to

Select one:

a. Raise its price until it breaks even.

b. Produce in the short run to minimize its loss, but exit the industry in the long run.

c. Cease production immediately since it is incurring a loss and does not cover daily costs.

d. Lower its price so that it can sell more units of output.

Which one is this?


In The Short Run Monopoly Profits Select One A

may be positive, negative, or zero.



In the short run, monopoly profits:

Select one:

a. may be positive, negative, or zero.

b. are

positive if the monopolist’s elasticity of demand is less than 1.

c. are positive if the monopolist’s selling price is above average variable cost.

d. are positive because of the monopolist’s market power.


Hello There I Have A Really Important Assignment And I Am Struggling With Questions Number 1 5 6 And 7 I Really


Hello there, I have a really important assignment and I am struggling with questions number 1,5,6, and 7. I really

need help with this, and I would really appreciate if someone can give me the explanations/full answers too, to be able to learn it.

An import quota is
O a limit on the quantity of foreign goods that can be sold in a nation’s domestic market.
revenue producing for state governments but not the federal government.
O deflationary.
a tax on imported goods.Microeconomics

Natural Monopolyselect One A

emerges when average total cost is minimized if only one firm


Natural monopoly

Select one:

a. emerges when average total cost is minimized if only one firm

produces the good

b. is inefficient since it total costs are not minimized

c. does not compete with small competitive producers of the same good

d. is a monopoly in the market for natural resources


Are You Able To Explain How This Answer Is Solved And How Graphs Are Made For This Question? Assume A Firm


Are you able to explain how this answer is solved and how graphs are made for this question?

Assume a firm

in a monopolistically competitive industry is currently making a short run positive economic profit. Describe what is likely to happen to this firm’s profit in the long run. What role does elasticity play in this story?

Think of a few examples of monopolistically competitive industries (try to be creative and not just use the ones discussed in lectures). When doing so, think about the characteristics of this model (number of firms, product differentiation, barriers to entry, advertising).

Prince I cast
-gt; ( MR = me )
D -gt; Productive efficiency = Minimum Are
– Excess capacity = ATC – ( MR = mc)

The Company That You May Need To Have Invested $5 Million In Developing A New Product But The Development In A


The company that you may need to have invested $5 million in developing a new product but the development in a

quick finished at a recent meeting is it people report that the introduction of expected sales of the new product to $3 million if it would cost $1 million to finish development and if you go ahead and do so ?what is your most that you should pay to complete development?


Determine Whether Each Of The Following Topics Would More Likely Be Studied In Microeconomics Or


Determine whether each of the following topics would more likely be studied in microeconomics or




The effect of a large government’s budget deficit on the economy’s price level

The effect of government regulation on a monopolist’s production decisions

A consumer’s optimal choice when buying a flat-screen TV


Cutting Edge Pharmaceuticals Pty Ltd (A Monopoly Firm) Has The Following Demand (Average Revenue)


Cutting Edge Pharmaceuticals Pty Ltd (a monopoly firm) has the following demand (average revenue)


AR = 100 – Q

The marginal cost of production is given as constant and equal to $10.

a) What is the equation for the MR function? In showing this equation for the MR function explain the relationship between average revenue and marginal revenue. Determine the profit maximizing level of output of the firm (1 mark)

b) What is the equilibrium monopoly price set by the firm and what will be the monopoly profit earned? (1 mark)

c) Illustrate the market demand and marginal cost, average cost of this firm as well as, profit maximizing price quantity and profit level on a diagram (1 mark)


Explain Why In Each Answer 1 Suppose A Firm’S Profit Is Given By


Explain why in each answer.

1. Suppose a firm’s profit is given by

the equation p = -200 + 80Q – .2Q2. Which of the following is true?

a) The firm’s marginal profit is given by the equation: Mp = 80 – .2Q.

b) The firm’s profit-maximizing output is Q = 400.

c) The firm’s profit-maximizing output is Q = 200.

d) The firm’s marginal profit is given by the equation: Mp = 80 – 2Q.

e) The firm’s profit-maximizing output is Q = 800.

2. A firm’s total cost function is given by: C = 1,000 + 15Q. At an output of 200 units,

a) Total cost is $4,000 and marginal cost is $3,000.

b) Total cost is $3,000 and fixed cost is $1,000.

c) Total cost is $4,000 and marginal cost is 15.

d) Average total cost is constant.

e) Answers c and d are both correct.

3. A small liberal arts college is trying to predict enrollment for the next academic year. The vice president for business states that enrollment has tended to follow a pattern described by E = 18,000 – .5P, where E denotes total enrollment and P is yearly tuition.

a) If the school sets tuition at $20,000, how many students can it expect to enroll?

b) If the school seeks to enroll 6,000 students, what tuition should it charge?

c) If the school wants to maximize total tuition revenue, what tuition should it charge?

d) As the vice president for business, what tuition would you recommend? Why?

4. University of Notre Dame is a premier institution that draws students from all over the world to its campus. Although it is privately funded, it aspires to world-class quality and reputation, which are enhanced when out-of-state residents enroll. Data suggest that in-state enrollment can be described by the equation:

QI = 25,000 – PI,

where QI = in-state enrollment and PI = in-state tuition. Out-of-state enrollment is given

by: QN = 13,500 – .5PN.

a. If tuition for in-state students is $14,000 and for out-of-state students is $19,000, what is total enrollment and demand elasticity for each type of student?

b. Suppose that the marginal cost to the university of an additional student is $7,000. Is Major University maximizing profit at its current tuition charges? Explain.

c. Because of major funding cuts, the university is expecting to reduce its total enrollment to 11,000 students next year. The university is free to set any tuition charges it wishes. If the goal is to maximize total tuition revenue, what should in-state tuition, out-of-state tuition, and respective enrollments be?


Which One Is True For Evil Corp That Produced 100 Million Units Of Its Product At An Average Cost Of $6 Last


Which one is true for Evil Corp. that produced 100 million units of its product at an average cost of $6 last

year, and in this year it expanded its plant capacity and produced 200 million units at an average cost of $7, that it is experiencing:

pick one:

a. increasing marginal product

b. dis-economies of scale

c. neither economies of scale or dis-economies of scale

d. economies of scale


Almia And Adjikistan Are Two Open Economies Producing Goods A And B Many People In​ Almia Including The


Almia and Adjikistan are two open economies producing goods A and B. Many people in​ Almia, including the

leading​ economists, are lobbying for trade. They feel that the country has a comparative advantage in good A that could be traded with good B from Adjikistan. The government of Adjikistan is also under pressure from various groups to encourage trade with Almia.​ However, when both countries begin to​ trade, gains from exporting good A to Adjikistan turn out to be much lower than what​ Almia’s economists had anticipated.

Which of the​ following, if​ true, would explain this​ outcome?

A. With the introduction of​ trade, Adjikistan now has access to​ Almia’s advanced production technology in A.

B. Industries in Almia have better environmental standards than Adjikistan.

C. The Almian workers are more efficient in producing good A than good B.

D. The opportunity cost of producing good A in Almia is very low.

E. Almia has a very large workforce.


Which Of The Following Is Not A Characteristic Of A Competitive Market?Select


Which of the following is NOT a characteristic of a competitive market?



a. There are many buyers and sellers with easy entry and exit

b. Profit is maximized where marginal revenue equals price

c. In order to sell more output, a competitive firm must lower price

d. Each seller produces the same good


There Are Six Potential Consumers Of Computer Games Each Is Willing To Buy Only One Game Consumer 1 Is Willing To


There are six potential consumers of computer games,each is willing to buy only one game. Consumer 1 is willing to

pay $40 for a game, consumer 2 is willing to pay $35,consumer 3 is willing to pay $30,consumer 4 is willing to pay $25,consumer 5 is willing to pay $20,and consumer 6 is willing to pay 15.

a)Suppose the market price is $30.What is the total consumer surplus.


Question One Consider The Market For Snowmobiles In Wisconsin There Are Two Major Producers Avalanche And


Question One

Consider the market for snowmobiles in Wisconsin. There are two major producers, Avalanche and

IceRunner. The demand for snowmobiles is characterized by the following equation:

P = 3400 – A – I,

where A represents the number of snowmobiles Avalanche produces and I represents the number of snowmobiles IceRunner produces in a year.

The two companies have the same cost structures. Each have a marginal cost that is equal to average cost equal to 400 for every level of output.

Make sure to explain clearly how you are solving the problem and show your work.

a. This is a Cournot situation where Avalanche and IceRunner choose output simultaneously. They are building the snowmobiles in the current year and then selling them for the price determined by the market in the next year. In the Nash equilibrium identify

1) the quantities chosen by Avalanche and IceRunner,

2) the market price that will result,

3) , and the profits received by Avalanche and IceRunner.

Make sure to explain clearly how you are solving the problem and show your work. (15 points)

b. Say that Avalanche and IceRunner decided to form a cartel. If the cartel were successful, what would be

1) the combined output,

2) the price,

3 and the combined profits

for the two companies in the snowmobile market? how you found this answer (10 points)

c. Say Avalanche and IceRunner had made an agreement to each produce half of the combined output the successful cartel would choose. IceRunner moves first and produces exactly that amount. Do you believe that a profit maximizing Avalanche will hold to the agreement? In the course of your analysis of this decision, show what would be the profit maximizing output choice that Avalanche would make given that Avalanche has seen the output that IceRunner has produced at that point. Make sure that you explain why you choose this output (5 points)


Suppose Canada Produces Only Cars And Trucks The Resources That Are Used In The Production Of These Two Goods Are


Suppose Canada produces only cars and trucks. The resources that are used in the production of these two goods are

not specialized—that is, the same set of resources is equally useful in producing both trucks and cars.

The shape of Canada’s production possibilities frontier (PPF) should reflect the fact that as Canada produces more trucks and fewer cars, the opportunity cost of producing each additional truck Blank?



-remains constant

Based on the previous description, the tradeoff Canada faces between producing trucks and cars is best represented by BLANK?


-GRAPH 2 .

New part:

Suppose that Spain and Tunisia both produce oil and wine. Spain’s opportunity cost of producing a bottle of wine is 5 barrels of oil while Tunisia’s opportunity cost of producing a bottle of wine is 10 barrels of oil.

By comparing the opportunity cost of producing wine in the two countries, you can tell that BLANK? has a comparative advantage in the production of wine and BLANK? has a comparative advantage in the production of oil.

First blank



Second blank



Suppose that Spain and Tunisia consider trading wine and oil with each other. Spain can gain from specialization and trade as long as it receives more than Blank? of oil for each bottle of wine it exports to Tunisia. Similarly, Tunisia can gain from trade as long as it receives more than Blank? of wine for each barrel of oil it exports to Spain.

First blank

-1 barrel

-1/10 barrel

-1/5 barrel

-5 barrels

-10 barrels

Second blank

-1 barrel

-1/10 barrel

-1/5 barrel

-5 barrels

-10 barrels

Based on your answer to the last question, which of the following prices of trade (that is, price of wine in terms of oil) would allow both Tunisia and Spain to gain from trade? Check all that apply.

-1 barrel of oil per bottle of wine

-7 barrels of oil per bottle of wine

-11 barrels of oil per bottle of wine

-6 barrels of oil per bottle of wine


Consider A Market With Two Firms Where The Inverse Demand Function Is Given By P = 28 2q And Where Q = Q1 + Q2


Consider a market with two firms where the inverse demand function is given by p = 28 – 2q and where q = q1 + q2.

Each firm has the total cost function c(qi) = 4qi, where i = {1,2}. a) Compare price level, quantities and profits in this market calculating the Cournot equilibrium and the Stackelberg equilibrium. Draw a graph with best response functions and illustrate the Cournot and Stackelberg solutions in that graph. b) Compare your solutions in a) to the outcomes under perfect competition and under collusion (monopoly) and illustrate your additional findings in the same graph.

P= 28- 2(91 1 +962 )
X1 = 128- 2 ( 91, +9 2)) 011 – 4011
any/aor = 0 = 28-4011- 292- 4911= 0
28 – 2012 = V1
Similarly, for tion 2 ,
128 – 201 = 012
Best duesponse function
91 = 92…Microeconomics

1/ The Incentive To Cut Costs Is ________ For ________ Prisons (As/Than) It Is For ________ Prisons Group


1/ The incentive to cut costs is ________ for ________ prisons (as/than) it is for ________ prisons.


of answer choices

a. about the same; private; public

b. smaller; private; public

c. greater; private; public

d. greater; public; private

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Question 8

1 pts

Suppose a customer at a restaurant is deciding whether or not to order dessert. Marginal thinking means that the customer should compare:

Group of answer choices

a.the total benefit from the entire meal and dessert with the additional cost of the dessert.

b.the total benefit from the entire meal and dessert with the total cost of the meal and dessert.

c.the additional benefit from the dessert with the additional cost of the dessert.

d. the marginal benefit from the meal with the marginal cost of the dessert.

Question 121 pts

If the government institutes a tax on suppliers of Cheesy-Poofs, the market for Cheesy-Poofs will see:Microeconomics

You Won A Free Ticket To See A Concert By Eason Chan A Local Pop Singer You Cannot Resell It (Say Your Photo Id


You won a free ticket to see a concert by Eason Chan, a local pop singer. You cannot resell it (say, your photo ID

will be checked at entrance). Yo-Yo Ma, the world’s finest cellist, is performing on the same night and is your next-best alternative activity. Tickets to see Yo-Yo Ma cost $800 each. On any given day, you would be willing to pay up to $1000 to see Yo-Yo Ma. Assume there are no other costs of seeing either performer. Based on this information, what is the opportunity cost of seeing Eason Chan?

(A) $0. (B) $200. (C) $800. (D) $1000.


Determine Whether Each Of The Following Topics Would More Likely Be Studied In


Determine whether each of the following topics would more likely be studied in

microeconomics or macroeconomics.

-The effect of government regulation on a monopolist’s production decisions

-The effect of a large government budget deficit on the economy’s price level

-The effects of the Internet on the pricing of used cars



6. Normative and positive statements

The following table contains statements that provide some analysis of policies that address globalization.

Categorize each of them as positive or normative.

-In the past decade, Canadian companies have outsourced millions of jobs overseas.

-Companies that outsource jobs are acting immorally.

-If the Canadian government were to institute higher tariffs on imports, companies would stop outsourcing jobs.

-The Canadian government should institute higher tariffs on imports.



7. Agreement and disagreement among economists

Suppose that Gilberto, an economist from a business school in Nova Scotia, and Juanita, an economist from a university in Quebec, are arguing over saving incentives. The following dialogue shows an excerpt from their debate:

Juanita: I think it’s safe to say that, in general, the savings rate of households in today’s economy is much lower than it really needs to be to sustain the improvement of living standards.

Gilberto: I think a switch from the income tax to a consumption tax would bring growth in living standards.

Juanita: You really think households would change their saving behaviour enough in response to this to make a difference? Because I don’t.

The disagreement between these economists is most likely due to BLANK? .

-differences in value

-differences in scientific judgement

-differences in perception versus reality

Despite their differences, with which proposition are two economists chosen at random most likely to agree?

-Rent ceilings reduce the quantity and quality of available housing.

-Having a single income tax rate would improve economic performance.

-Immigrants receive more in government benefits than they contribute in taxes.


A New Machine Comes With 100 Free Service Hours Over The First Year

Additional time costs $50 per hour.What


A new machine comes with 100 free service hours over the first year. Additional time costs $50 per hour. What

are the average and marginal costs per hour for the following service hour quantities?

(a) 75 average = marginal =

(b) 125 average = marginal =

(c) 250 average = marginal =


17 The Fact That The Ppf Usually Bows Away From The Origin Implies That A) As The Production Of Any


17. The fact that the PPF usually bows away from the origin implies that …

a) as the production of any

good increases, there is an increase in the opportunity cost of producing it. b) as the production of any good increases, there is a decrease in the opportunity cost of producing it. c) getting more of one good means getting less of another good. d) getting more of one good means getting more of another good. e) resources are perfectly fungible, easily moved between alternative uses to satisfy consumer demand.


Question 1 Cambonesia Is A Small Exporter Of Bananas Without Trade The Price For Bananas Is $1 200 Per Tonne


Question 1.Cambonesia is a small exporter of bananas. Without trade, the price for bananas is $1,200 per tonne.

The world price of bananas is $2,000 per ton. Currently, Cambonesian exporters pay $500 for every tonne of bananas shipped abroad. Suppose that the government of Cambonesia decides to pay domestic producers half of the transportation costs for every tonne of banana exported. Discuss the welfare implications of such a policy in the market for bananas in Cambonesia. Illustrate answer with appropriate diagrams. ( consider the impact on consumer surplus, producer surplus, the government’s revenue or expenditure, and deadweight loss (if any), within the market.)

Question2. In an effort to encourage clean energy usage, suppose that the government offered a per unit subsidy (β) to buyers in the market for roof-solar-panels in Cambonesia. Currently, the supply of solar panels in Cambonesia is constrained by its manufacturing capacity, but the government is confident that this problem will be reduced in the future with increased political and investment support. Using the information given, discuss the welfare implications of this subsidy in the market for roof-solar-panels in Cambonesia. Please illustrate your analysis with appropriate diagrams. (consider the impact on consumers, producers, the government’s revenue or expenditure, and deadweight loss (if any), within the market.)


Looking At Differences Between A Single Firm Within A Perfectly Competitive Market And A Monopoly Which Of The


Looking at differences between a single firm within a perfectly competitive market and a monopoly, which of the

following is true?

a. A single firm within a perfectly competitive market, sees the entire downward sloping demand curve of the perfectly competitive market.

b. A single firm within the perfectly competitive market can set its price at any level and willl not see a change in the demand.

c. Because it is the only producer in the market, the monopoly sees the entire downward sloping demand curve of the market.

d. Because it is the only producer in the market, the monopoly will sell the same amount, no matter what price it charges.

e. A single firm within a perfectly competitive market must be concerned about the impact of the price effect and the quantity effect.


Given That Tc Function In The Short Run Is Tc=100+50q12q^2+Q^3 Were Tc Is The Total Cost And Q Is The Level Of


given that tc function in the short run is tc=100+50q-12q^2+q^3 were tc is the total cost and q is the level of

output, determine the total fixed cost function, the total variable cost function, average variable cost function, marginal cost function. calculate total cost, average variable cost and marginal cost when the firm produces 10 units of out put. calculate the level of out put at which average variable cost is minimum.


Question 1discuss The Long Run Average Cost Curve Of A Firm And How It Represents



Discuss the long – run average cost curve of a firm and how it represents

returns to scale.

Substantiate the answer with the aid of diagram.


Depending on the characteristics of the market structures, firms will experience different profit maximizing positions in the short-run and long-run In terms of this statement, discuss the profit maximizing positions of a monopolistically competitive firm and monopolist in the long-run.


I Need To Review For Microeconomics 101 From Uw Madison I Only Want To Review Homework Which Deal With


I need to review for microeconomics 101 from UW Madison.

I only want to review homework which deal with

numerical calculation. So, I would love to know the homework type problem. What I mean is I need you to classify the type of question( find supply, find maximum revenue, maximum profit, find maximum profit in cournot model) and a thorough solution how you solve problems. You can reuse any material in the Internet

All of my request is to classify micro econ problems and attach a solution for it so that I can review better for the test. A thorough review is highly desired

d. Figure SSD. The graph below describes supply and
demand for a perfectly competitive market.
5. a shift of the…Economics

What Are The Positive


What are the positive

and negative economic effects of rent control?

Question 4 — Rent Control (40 points) Let the demand and supply functions for one-bedroom rental housing in San Francisco be given
by QD = 449,000 — 200R , and Q3 = -1000 + 100R, where R is the monthly rent of a one-
bedroom apartment. 3) (10) What is the equilibrium rent, R*, and quantity of housing on the market, Q*? Graph
your answer, showing the equilibrium P, Q*. h) (10) What happens in the market when we institute rent control: rents are capped at IT = $1000 per month. What is Q3? Is there a shortage or a surplus as a result?
Illustrate on your graph above. c) (10) What is the change in consumer surplus, producer surplus and social welfare from
the price ceiling? d) (10) What are the positive and negative economic effects of rent control? Microeconomics

More Than A Decade Ago The Cambonesian Government Began Stockpiling Wheat Because It Introduced A Minimum Price


More than a decade ago, the Cambonesian government began stockpiling wheat because it introduced a minimum price

policy where the state would purchase any resulting surplus from the nation’s wheat farmers. Recently, it was announced that the government would adjust the price of wheat sales downward in order to hasten the destocking of its huge stockpiles of wheat. Please use an appropriate diagram, explain what would happen to quantity demanded, quantity supplied, and government spending, in Cambonesia’s wheat when the policy adjustment takes place. Who benefits? Who loses? Would consumers’ total expenditure on wheat be more like to rise or fall, as a result of this policy adjustment? Please explain the reasons. (It is not necessary to discuss welfare implications involving consumer surplus or producer surplus)


A Recent Report On Climate Change Was In The News A Lot In The Last Year (See For Example


A recent report on climate change was in the news a lot in the last year (see for example ). Guidance in the UN report for slowing climate change ranged from increasing use of electric vehicles and programmable thermostats to eating less meat. With this report in mind, what are your thoughts on the most promising approach to slowing climate change and how that approach would affect key climate controls (as described in Prof. Cerveny’s lecture)?


1 Explain Why The Characteristics Of Comparability And Consistency Are Important In Financial Reporting?


1. Explain why the characteristics of comparability and consistency are important in financial reporting?

2. What are the two key principles that are the foundation of the accrual basis of accounting.

3. Why might it be unfavorable for a firm to reduce repairs and maintenance, advertising, and research and development expenses?

4. If an investor wants to understand how well a firm is performing in their core industry, which profit number (gross, operating or net) would be the best to analyze? Explain why.


The Deering Manufacturing Company’S Short Run Average Cost Function In 2012 Was Ac = 3 + 4q Where Ac Is The


The Deering Manufacturing Company’s short- run average cost function in 2012 was AC = 3 + 4Q Where AC is the

firm’s average cost (in dollars per pound of the product), and Q is its output rate.

a) Obtain an equation for the firm’s short- run total cost function.

b) Does the firm have any fixed costs? Explain.

c) If the price of the Deering Manufacturing Company’s product (per pound) is $3, is the firm making profit or loss? Explain.

d) Derive an equation for the firm’s marginal cost function.


Microeconomics / Macroeconomics Theory Questions State Whether The Following Statements Are


Microeconomics / Macroeconomics Theory questions.

State whether the following statements are

True or False and Explain your answer.

P.S They are not linked to each other.

  • The introduction of a universal basic income would (other things being equal) unambiguously raise GDP in a New Keynesian model; but it would unambiguously lower GDP in a one-period competitive model.


The Market For


The market for

lobsters is perfectly competitive. Total cost for a firm that harvests q lobsters is given by TC = 800 + 1q2. The market demand for lobsters is QD = 2000 − 5P.

1. 2.

3. 4.


Find the output by each firm, the market price and the number of firms in operation when the market is in long-run equilibrium.

Suppose now that the government imposes a $450 luxury tax on each firm, raising costs to TC = 1250 + 1q2. In the short run, where the number of firms is the same as


in (1), find the new short-run output by each firm along with the new market price. Calculate the profit or loss earned by each firm in (2). Will there be entry or exit?

Find the new long-run equilibrium. How much output does each firm produce? What are the market price and the number of firms in opera

The market for lobsters is perfectly competitive. Total cost for a firm that harvests q lobsters
is given by TC = 800 + -q2. The market demand for lobsters is Qquot; = 2000 – 5P.
1. Find the output by each firm, the market price and the number of firms in operation
when the market is in long-run equilibrium.
2. Suppose now that the government imposes a $450 luxury tax on each firm, raising
costs to TC = 1250 + ;q2. In the short run, where the number of firms is the same as
in (1), find the new short-run output by each firm along with the new market price.
3. Calculate the profit or loss earned by each firm in (2). Will there be entry or exit?
4. Find the new long-run equilibrium. How much output does each firm produce? What
are the market price and the number of firms in operation?Microeconomics