Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

problem 1: If demand is represented by Qd = 50 -.5P +.005I where I is income and I = $50,000 and supply is represented by Qs = 100 +.4P - 2W where W is wages and W = $15.00.
a) Compute the equilibrium price and quantity where wages = W = $15.00.
b) Compute the equilibrium price and quantity if income falls to I = $40,000?
c) Plot the demand and supply for the two income level. In the graph, mark all values that fully identify the curve.

problem 2: Suppose an investment can yield three possible cash flows with their probabilities given in the parentheses:

$600(p = 0.5); $-100 (p = 0.2) and $800 (p = 0.3).

a) Compute the expected value and the standard deviation of this investment. Is this investment risky? Why?

b) The equation E(x) = 359 + 0.5SD describes the indifference curve of this investor. Is this investor risk averse, risk neutral, or risk loving? describe your answer and draw the curve.

c) How much would this person pay for the investment opportunity (certainty equivalent of the current investment)? How much is risk premium for the current investment?

problem 3: Patrick consumes only two goods: Celtic Music concerts and Celtic Springs Water. Patrick earns $100 per month at his part-time job in the library. The price of Celtic concerts is $10. The price of Celtic Springs Water is $2. Patrick currently goes to 5 Celtic concerts and consumes 25 bottles of Celtic Spring Water in a month.

a) Draw Patrick's budget constraint and optimal consumption bundle. Please put Celtic concerts on the x-axis.

b) In April Patrick receives a 5% pay increase. Meanwhile the inflation raises the price of concerts to $10.50 and the price of Celtic Springs Water to $2.10. Draw Patrick's new budget constraint and optimal consumption bundle. Please put Celtic concerts on the x-axis. How many Celtic concerts does he attend in April? How many bottles of water does he drink in April?

problem 4: The demand equation for crossing the G.W.Bridge in New York City is P = 50-0.0001Q where P is the toll at the bridge and Q is the number of vehicles that cross the bridge every day.

a) Compute the toll that would maximize revenue for the state of New York. At this toll, how many cars would cross the bridge?

b) What is the price elasticity at this toll? describe your answer.

c) Also illustrate this price/quantity combination in a graph with demand curve and marginal revenue curve.

d) Suppose the company in charge of the maintenance of the bridge successfully negotiates a 20% increase in its annual fee. The State of New York hires you to advise them how to cover this cost. Would you advise them to raise the toll you computed in part a)? (Yes, or No, describe your answer). Would you advise them to raise revenue some other way? describe your answer.

problem 5: England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 50 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 40 scones per hour or 2 sweaters per hour.

a) Which country has the absolute advantage in the production of each good? Which country has the comparative advantage?

b) If England and Scotland decide to trade, which commodity will Scotland trade to England? describe.

c) If a Scottish worker could produce only 1 sweater per hour, would Scotland still gain from trade? Would England still gain from trade?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91826

Have any Question? 


Related Questions in Microeconomics

Discussion questionplease read thoroughly and provide

Discussion Question Please read thoroughly and provide references • Manufactures of smartphones design products to be interactive with consumers. To remain competitive, designers are focused on getting a new product to m ...

Assignment multiyear plans and Assignment: Multiyear Plans and Analysis Preparation •

Assignment: Multiyear Plans and Analysis Preparation • Review the document titled "City of Charlottesville 2010 Annual Comprehensive Plan" located in the course shell. Write a three to four (3-4) page paper in which you: ...

Fiscal policy modulewhich has a larger effect on aggregate

Fiscal Policy Module Which has a larger effect on aggregate demand: an increase in government expenditure or an equal-sized decrease in taxes? Explain your answer. To eliminate a recessionary gap, which fiscal policy sho ...

Assignment production cost analysis and estimation applied

Assignment: Production Cost Analysis and Estimation Applied Problems Please complete the following two applied problems: Problem 1: William is the owner of a small pizza shop and is thinking of increasing products and lo ...

Assignmentthere is the widespread notion that economists

Assignment There is the widespread notion that economists rarely agree with each other. This seems perplexing when we note also that economics is often called the "Queen of the Social Sciences" (meaning that it is the mo ...

Assignmentthe paper is on googles business ethics in the

Assignment The paper is on Google's Business Ethics in the area of Sustainability. How does Google contribute or detract from various aspects of sustainability? Sustainable businesses make products and services which fil ...

Assignmentin the article at the beginning of the readings

Assignment In the article at the beginning of the readings book, Aronson talks about Social Psychology as a leap of faith, and about the imperfect nature of social psychological experiments (which is true of science in a ...

Assignmentselect and review an inspection report posted on

Assignment Select and review an inspection report posted on the OSHA website. The inspection reports can be searched by industry group or establishment name by accessing the reports through the OSHA's Statistics & Data P ...

You are an economic consultant and encounter a firm with

You are an economic consultant and encounter a firm with the following data: Quantity of Labor Fixed Costs Variable Costs Total Costs Quantity Marginal Costs 5 $150 20 6 $150 28 7 $150 34 8 $150 38 The wage rate is $8 pe ...

Assignmentone responsibility of an information assurance

Assignment One responsibility of an information assurance professional is to work with the organization's security team to explain risk assessment and report findings to executives. The report is likely to involve sensit ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen