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25 Microeconomics questions
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<p> d. pivot around XXX "X" XXXX. </p> <p><b>XXXXXX (17)</b><b> – (A) s</b><b>hift outward, XXXXXXXX to XXX XXXXXXX position</b> </p> <p><b>XXXXXXXXXXX:</b> XXXXXX constraint XXXXXXXXXX XXX XXXXXXX XXXXXXXXXX XX goods / services a XXXXXXXX can buy XXXXX XXX XXXXXX. XXX increase in income XXXX allow him XX buy XXXX. XX a XXXXXX, XXXXXX XXXXXXXXXX XXXX XXXXX XXXXXXX. </p> <table> <tbody><tr> <td> </td></tr> <tr> <td> </td></tr> </tbody></table> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> <br> </p> <p> Figure XXX XXXXXXX 18 </p> <p>XX. XXXX the XXXXXXXXXXXX curves in XXX XXXXXX above, which XX the following XXXXXXXXXX XX correct? </p> <p>a. XXXXX A is preferred equally to point E. </p> <p>b. <b>XXXXX A XX XXXXXXXXX XXXXXXX to XXXXX X.</b> </p> <p>c. XXX XXXXXX XXXXXXXXXX with XXXXX B contains XXXX Ho-XX's XXXX XXXX XXXXXXXXXX with point X. </p> <p>d. XXX XXXXXXX along XXXXXXXXXXXX curve I<sub>1</XXX> are preferred to XXXXX along indifference XXXXX I<XXX>2</XXX>. </p> <p><b>XXXXXX (XX)</b><b> – (B) XXXXX A XX preferred equally XX point X</b> </p> <p><b>XXXXXXXXXXX:</b> Point A is XXX preferred XXXXXXX XX point E XXXXXXX E represents XXXX quantities XX XXXX XXXXXXXX XXX Ho-Ho. Combination on point X XXXXXXXXXX more quantities of Ho-XX than twinkies. I<sub>1</sub> will not be preferable over I<XXX>2 </XXX>XXXXXXX XXXXXX XXXXXXXX less XXXXXXXX XX both XXXXX XXXX I<sub>2</XXX>. Therefore, XXXXXX (X) is XXXXXXX. </p> <p>19. XXXXXXX XX $X XXX quantity XXXXXXXX for the XXXXXXXX of XX-Yo Ma’s music from XXX “Piazzolla: XXXX XX XXX Tango” XXXXX XX 3 songs. XX the substitution XXXXXX XX the XXXXX <u>XXXXXXXX </u>XXXX $X XX $3 XX X XXXX, XXX XXX XXXXXX effect XX X XXXXX, what XXXXXX will XXX XXXXX XXXXXX have XX XXX number XX tracks consumers purchase from XXX XXXXXXXXX’s XXXXX? (X XXXXXX) </p> <p><b>Answer (19)</b><b> – </b>XX XXX relative XXXXX XX a XXXX falls, the substitution XXXXXX implies that people XXX XXXX XX XXXX XXXX XXX XXXX XX XXX substitutes. In XXXX case, substitution XXXXXX for every $X decrease in XXXXX is X song whereas income effect for XXXXX $2 XXXXXXXX in XXXXX XX 3 XXXXX. It implies XXXX consumer will substitute XXXX of Yo-Yo Ma’s music XX XXX price fall. The XXXXXXXX XXXXXX XXXX XX XXXX the XXXXX will XXXXXXXX XXX quantity demanded will XXXXXXXX. </p> <p>XX. Joe wants XX start his own business. XXX business he wants to XXXXX XXXX require that he XXXXXXXX a XXXXXXX XXXX XXXXX $XXX,000. Joe currently has $500,XXX in XXX bank XXXXXXX X XXXXXXX XXXXXXXX per year. If XXX purchases the factory XXXX his own XXXXX, XXXX is the annual <b><u>XXXXXXXX XXXXXXXXXXX XXXX</u></b> of XXXXXXXXXX the factory? </p> <p>a. $0 </p> <p>b. $X,000 </p> <p><b>c. $XX,000</b> </p> <p>d. $15,XXX </p> <p><b>XXXXXX (20)</b><b> – (X) $XX,XXX</b> </p> <p><b>XXXXXXXXXXX:</b> XX XXX purchases factory from XXX own XXXXX he will XXXX earn XXXXXXXX on remaining $100,XXX ($500,000 - $400,000). The interest XX $12,000 ($400,XXX × X%) foregone XXXX be the XXXXXX XXXXXXXX XXXXXXXXXXX XXXX. </p> <p>21. X XXXXXX-XXXXXXXXXX firm will XXXX XXXX in the short run XXXX </p> <p><b>a. price is XXXX than average XXXXXXXX cost.</b> </p> <p>b. XXXXX is XXXX XXXX average total cost. </p> <p>c. average revenue is XXXXXXX marginal cost. </p> <p>d. XXXXXXX revenue is XXXXXXX than average fixed cost. </p> <p><b>Answer (21)</b><b> – (X) XXXXX is XXXX than XXXXXXX variable XXXX</b> </p> <p><b>XXXXXXXXXXX:</b> XX short XXX, XXXXXXX are XXXXXXXXX at a XXXXX of output XXXXX marginal XXXXXXX (MR) is equal XX the marginal cost (XX). XX a general XXXX, XXX XXXX XXXX continue to XXXXXXX XX long as price exceeds average XXXXXXXX XXXXX. XXXX price XX less than average XXXXXXXX XXXX, the firm will shut down in the short-XXX XX it cannot cover XXX fixed costs. </p> <p> 22. XX XXX XXXX run, all of a firm's costs XXX XXXXXXXX. In this XXXX the XXXX XXXXXXXXX XXX a profit-maximizing XXXX XX XX </p> <p><b>a. XXXXXXXX XX price is XXXX than average XXXXX XXXX.</b> </p> <p>b. shutdown if XXXXX is XXXXXXX than average total XXXX. </p> <p>c. shutdown XX average revenue is greater XXXX average fixed cost. </p> <p>d. XXXXXXXX XX average revenue is XXXXXXX than XXXXXXXX cost. </p> <p><b>Answer (22)</b><b> – (X) shutdown if price XX XXXX than XXXXXXX XXXXX XXXX</b> </p> <p><b>XXXXXXXXXXX:</b> Same reasoning as described in Answer 22 XXXXX can be XXXXXXX XXXX except XXXX in XXX XXXX XXX XXX costs are variable. XXXX price is less XXXX XXXXXXX XXXXX XXXX for XXX XXXXXXXX levels XX output, the XXXX XXXX XXXX consistent XXXXXX which results in an XXXXXXXX XXXX down. </p> <p>XX. XXXXXXX monopoly firms XX not XXXX XX compete with other firms, the XXXXXXX in a XXXXXX XXXX a XXXXXXXX XX often </p> <p> a. not in the best XXXXXXXX of society. </p> <p> b. XXX that fails XX XXXXXXXX XXXXX XXXXXXXX well-XXXXX. </p> <p> c. inefficient. </p> <p> <b>d. All of the above XXX correct.</b> </p> <p><b>XXXXXX (XX)</b><b> – (X) XXX XX XXX XXXXX XXX XXXXXXX</b> </p> <p><b>XXXXXXXXXXX:</b> XXXXXXXX XXXXXX XXXXXXXXXXXXXX because high price is XXXXXXX for less XXXXXXXX XXX it is meant to improve XXX XXXXXXXXX of only selected people and XXX the society XX a whole. For this XXXXXX, it is also not in the XXXX interest XX XXXXXXX. <XX> </p> <p> </p> <p><i> </i></p> <p><i>24. In the XXXXXX above, the XXXXXXXX cost curve XXX a monopoly firm XX XXXXXXXX by curve </i></p> <p><i>a. X. </i></p> <p><i>b. B. </i></p> <p><i><b>c. X.</b> </i></p> <p><i>d. X </i></p> <p><i> </i></p> <p><i><b>Answer (XX)</b><b> – (C) XXXXX X</b> </i></p> <p><i> </i></p> <p><i><b>Explanation:</b> For a XXXXXXXX there XX a price XXXXXX i.e., a monopolist need to reduce XXXXX in order XX sell additional XXXXX. Therefore, marginal XXXX XXXXX for XXXXXXXX market XX upward sloping XX XXXXXXXX XXXXX XXXXX XXXX XXX increase in XXXXXX. XX the other hand, XXXXX cost XXXXXX XXX XXXXXXXXXX XXX XXXXXXXX sloping. </i></p> <p><i> </i></p> <p><i>25. In the XXXXXX XXXXX, XXXXX XXXX curve for a XXXXXXXX firm XX depicted by XXXXX </i></p> <p><i>a. X. </i></p> <p><i><b>b. X.</b> </i></p> <p><i>c. C. </i></p> <p><i>d. X. </i></p> <p><i> </i></p> <p><i><b>Answer (25)</b><b> – (B) XXXXX X</b> </i></p> <p><i> </i></p> <p><i><b>XXXXXXXXXXX:</b> See explanation in answer 24. </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b>CONGRATULATIONS! YOU XXX XXXXXXXX. XXX XXXX XX OPTIONAL</b> <b>XXXX X. EXTRA CREDIT. XXX XXX <u>XXX XXXXXXXXX</u> XX XX this section. XX obtain XXXX extra credit, you XXXX show all of your XXXX for XXXXXXXX requiring calculations. (XX XXXXXX)</b> </i></p> <p><i><b></b> </i></p> <p><i><b>X.C. 1: </b>XXXXXXX that instead XX a supply-XXXXXX XXXXXXX, you XXX XXXXX XXX following information: </i></p> <p><i> </i></p> <p><i><i>Q </i><XXX>s</XXX> = XXX + 3###i</i></p> <p><i>/i### </i></p> <p><i><i>Q </i><sub>d</XXX> = XXX - 2###i</i></p> <p><i>/i### </i></p> <p><i> </i></p> <p><i>From XXXX XXXXXXXXXXX compute equilibrium XXXXX XXX quantity. (2 XXXXXX) </i></p> <p><i> </i></p> <p><i><b>Answer (XX-1)</b><b> </b> </i></p> <p><i> </i></p> <p><i>XXX XXXXXXXXXXX price XXXX XX the XXXXX XXXXX X s = X d. Therefore, </i></p> <p><i> </i></p> <p><i>100 + XX = 400 – 2P </i></p> <p><i>XX + 2P = XXX – XXX </i></p> <p><i>5P = XXX </i></p> <p><i>X = XX </i></p> <p><i> </i></p> <p><i><b>XXX equilibrium price XX XXXXXXXXX XX XXX unit.</b> </i></p> <p><i> </i></p> <p><i>XXXXXXXXXXX XXXXXXXX can XXX be XXXXXX out by putting XXX value of X and solving XXX Q. Hence, </i></p> <p><i> </i></p> <p><i>X s = 100 + X(XX) </i></p> <p><i>= 100 + 180 </i></p> <p><i><b><u>= 280 XXXXX</u></b> </i></p> <p><i>Or; </i></p> <p><i>Q d = 400 – X(60) </i></p> <p><i>= XXX – XXX </i></p> <p><i><b><u>= XXX Units</u></b> </i></p> <p><i> </i></p> <p><i><b>XXXXXX XXXXXXXXXX XXXXXXXX is XXX XXXXX.</b> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i><b>X.X. X: </b>Sketch a XXXXX demonstrating XXX XXXXXXXXXXXXX XXXX XXXXX XXXXXXX in a perfectly XXXXXXXXXXX market XXXXX firms XXX XXXXXXXXXXXX economic losses. XXXXXXXX XXXXX, revenue, and XXX economic losses XX XXXX graph. XXXXX XXXX graph, determine whether an individual firm XXXX shut down in XXX XXXXX XXX, or XXXXXX to XXXXXX in the XXXXXX. Explain your answer. (X XXXXXX) </i></p> <p><i><b></b> </i></p> <p><i><b>Answer (XX-2)</b> </i></p> <p><i>To XXXXXXXXX XXXXXXX or not an XXXXXXXXXX firm XXXX shut XXXX in XXX XXXXX XXX, XXXXXXXX and XXXXXXX XXXXXXXX XXXXX XXXXX to be analyzed. In XXX XXXXX XXX, a firm can choose to stay in XXX XXXXXX as XXXX XX its average variable cost XX XXXXX Po. When it rises XXXXX the XX XXXXX, the XXXX XXXX shut XXXX in XXX XXXXX XXX. </i></p> <p><i> </i></p> <p><i><b><i></i></b><i> </i></i></p> <p><i><i><i> </i></i></i></p> <p><i><i><i><b>X.X. X: </b>XXXXX XXX been much discussion XX XXXXXXXXXXXX XXXXXXXXXXX XXX XXXXXXX gas XXXXXXXX companies in the United XXXXXX. Using your XXXXXXXXXXXXX of monopolies, XXXXXXX XXX XXXXXX XXXXXX of deregulation on prices in these two industries. (2 XXXXXX) </i></i></i></p> <p><i><i><i> </i></i></i></p> <p><i><i><i><b>Answer (EC-X)</b> </i></i></i></p> <p><i><i><i>XXX XXXX objective of a monopolist is to achieve minimum XXXXXXXX XXXXXX XXXXX and charge XXX maximum possible price. XXXXXXX or not Electricity XXX XXXXXXX XXX monopolies in XXXXXX States should be deregulated depends XXXXXXXXX on XXX likely impact on competition. XX XXX market XX XXXXXXXXXXX, XXXXXXXXXXXX XXXX XXXXX reduction in price and provide benefits XXXXXXXXXXXX XX lower XXX middle income XXXXXXXXX. XXXXXXX, if market is not XXXXXXXXX XXXXXXXXXXX, it will XXXXX inefficiency i.e., production will be lower XXX XXXXX XXXX be higher in some areas. Furthermore, it XXXX XXXX XXXX XXXXXXXXXX XXXXXXXX. To XX effective, deregulation XXXXXX result in XXXXXXXXXXXX competitive markets.</i></i></i></p> <p><i><i><i><XX></i></i></i></p></i></i>">
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