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Illustrate and explain the three stages associated with the law of variable proportions
(Solved)
Illustrate and explain the three stages associated with the law of variable proportions
Date posted:
February 7, 2019
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Answers (1)
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You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits....
(Solved)
You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits. This firm is a monopolist which sells in two distinct markets, one of
which is completely sealed off from the other.
As part of the analysis, you establish that the total demand for the firm‟s output is given by the
following equation:
Q = 50 – 0.5P
and the demand for the firm‟s output in the two markets is given by the following equations:
Q1 = 32 – 0.4P1 and
Q2 = 18 – 0.1 P2
Where: Q = total output
P = Price
Q1 = Output sold in Market 1
Q2 = Output sold in Market 2
P1 = Price charged in Market 1
P2 = Price charged in Market 2
The cost of production is given by C = 50 + 40Q
Where C = total cost of producing bread.
How much profit would the firm earn if it sold the output at a single price, and if it discriminates?
Date posted:
February 7, 2019
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Answers (1)
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You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits....
(Solved)
You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits. This firm is a monopolist which sells in two distinct markets, one of
which is completely sealed off from the other.
As part of the analysis, you establish that the total demand for the firm‟s output is given by the
following equation:
Q = 50 – 0.5P
and the demand for the firm‟s output in the two markets is given by the following equations:
Q1 = 32 – 0.4P1 and
Q2 = 18 – 0.1 P2
Where: Q = total output
P = Price
Q1 = Output sold in Market 1
Q2 = Output sold in Market 2
P1 = Price charged in Market 1
P2 = Price charged in Market 2
The cost of production is given by C = 50 + 40Q
Where C = total cost of producing bread.
What price must be charged in each market in order to maximize profits?
Date posted:
February 7, 2019
.
Answers (1)
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You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits....
(Solved)
You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits. This firm is a monopolist which sells in two distinct markets, one of
which is completely sealed off from the other.
As part of the analysis, you establish that the total demand for the firm‟s output is given by the
following equation:
Q = 50 – 0.5P
and the demand for the firm‟s output in the two markets is given by the following equations:
Q1 = 32 – 0.4P1 and
Q2 = 18 – 0.1 P2
Where: Q = total output
P = Price
Q1 = Output sold in Market 1
Q2 = Output sold in Market 2
P1 = Price charged in Market 1
P2 = Price charged in Market 2
The cost of production is given by C = 50 + 40Q
Where C = total cost of producing bread.
Determine the total output that the firm must produce in order to maximize profits.
Date posted:
February 7, 2019
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Answers (1)
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Given a hypothetical consumption function of the form:
C = a + bYd
Where Yd = Y – T
And Y = Income
...
(Solved)
Given a hypothetical consumption function of the form:
C = a + bYd
Where Yd = Y – T
And Y = Income
T = Taxes and that:
Government spending and investment are exogenously determined at G and I respectively: Determine Government Spending
Multiplier.
Date posted:
February 7, 2019
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Answers (1)
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What are the major causes of inflation?
(Solved)
What are the major causes of inflation?
Date posted:
February 6, 2019
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Answers (1)
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Explain the concept of liquidity trap
(Solved)
Explain the concept of liquidity trap
Date posted:
February 6, 2019
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Answers (1)
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How do commercial banks "create credit?? What are the limitations to this credit creation?
(Solved)
How do commercial banks "create credit‟? What are the limitations to this credit creation?
Date posted:
February 6, 2019
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Answers (1)
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You are given the following information about the commodity and Money markets of a closed economy
without government intervention.
The commodity market
Consumption function:
C = 50 + 2/5Y
Investment...
(Solved)
You are given the following information about the commodity and Money markets of a closed economy
without government intervention.
The commodity market
Consumption function:
C = 50 + 2/5Y
Investment function:
I = 790 – 21r
The Money Market
Precautionary and Transactions demand for
money MDT = 1/6 Y
Speculative demand for money
MDS = 1200 -18r
Money supply
MS = 1250
Determine the equilibrium levels of income and interest rate for this economy
Date posted:
February 6, 2019
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Answers (1)
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What are the likely effects of an expansionary monetary policy in an economy?
(Solved)
What are the likely effects of an expansionary monetary policy in an economy?
Date posted:
February 6, 2019
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Answers (1)
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Explain the various motives of holding money.
(Solved)
Explain the various motives of holding money.
Date posted:
February 6, 2019
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Answers (1)
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Define Money and outline its major functions.
(Solved)
Define Money and outline its major functions.
Date posted:
February 6, 2019
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Answers (1)
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Assume the following information represents the National Income Model of an "Utopian" economy.Y = C + I + GC = a + b(Y – T)T...
(Solved)
Assume the following information represents the National Income Model of an „Utopian? economy.
Y = C + I + G
C = a + b(Y – T)
T = d + tY
I = IO
G = GO
Where a > O; O < b < 1
d > O; O < t < 1
T = Taxes
I = Investment
G = Government Expenditure
Find the equilibrium values of income, consumption and taxes.
Date posted:
February 6, 2019
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Answers (1)
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The total cost equation in the production of bacon at some hypothetical factory is
C = 1000 + 100Q – 15Q2 + Q3
Where C = Cost...
(Solved)
The total cost equation in the production of bacon at some hypothetical factory is
C = 1000 + 100Q – 15Q2 + Q3
Where C = Cost measured in shillings, while Q = quantity measured in kilograms
What is the Marginal cost of the 12th Kilogram?
Date posted:
February 6, 2019
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Answers (1)
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The total cost equation in the production of bacon at some hypothetical factory is
C = 1000 + 100Q – 15Q2 + Q3
Where C = Cost...
(Solved)
The total cost equation in the production of bacon at some hypothetical factory is
C = 1000 + 100Q – 15Q2 + Q3
Where C = Cost measured in shillings, while Q = quantity measured in kilograms.
Compute the total and average costs at output level of 10 and 11 kilograms.
Date posted:
February 6, 2019
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Answers (1)
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Briefly explain and illustrate quasi-rent.
(Solved)
Briefly explain and illustrate quasi-rent.
Date posted:
February 6, 2019
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Answers (1)
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Using well labelled diagrams, illustrate cases when the total factor payments may equal to economic rent,
or transfer earnings or shared between the two.
(Solved)
Using well labelled diagrams, illustrate cases when the total factor payments may equal to economic rent,
or transfer earnings or shared between the two.
Date posted:
February 6, 2019
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Answers (1)
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Explain what is meant by the terms transfer earnings and economic rent of a factor of production
(Solved)
Explain what is meant by the terms transfer earnings and economic rent of a factor of production
Date posted:
February 6, 2019
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Answers (1)
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A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 +...
(Solved)
A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 + 4Q and the total fixed cost is 4.
Determine the output level at the break-even point.
Date posted:
February 6, 2019
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Answers (1)
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A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 +...
(Solved)
A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 + 4Q and the total fixed cost is 4.
Determine the level of super-normal profit if any.
Date posted:
February 6, 2019
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Answers (1)