Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

1. A student buys five new college textbooks during his first year at school at a cost of $80 each. Used books cost only $50 each. When the bookstore announces that there will be a 10% increase in the price of new books and a 5% increase in the prize of used books, the student's father offers him $40 extra.

a. What happens to the student's budget line? Illustrate the change with new books on the vertical axis.

b. Is the student worse off or better off after the price change. Explain.

2. Since the price of gasoline has risen significantly, the demand for large SUV's has decreased while the demand for comparatively priced but more economical sedans has increased. Using substitution and incone effect analysis, explain and show graphically what has happened to the market for SUV's.

3. Suppose a firm's cost function is C(q)=4q^2+16. At the market price of $20, the firm is producing 5 units of output.

a. Find VC, FC, AC, AVC, AFC.

b. Find the output that minimizes AC

c. At what range of prices will the firm produce a positive output.

d. At what range of prices will the firm earn a negative profit.

e. At what range of prices will the firm earn a positive profit.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M9292956

Have any Question? 


Related Questions in Microeconomics

Question in europe the uk is the only country where there

Question: In Europe, the UK is the only country where there has been a consistent tradeoff between inflation and unemployment. What factors caused this tradeoff to occur in Britain but not in Continental Europe? The resp ...

Question many firms offer employees various perks for

Question: Many firms offer employees various "perks" for working for their firm. Often times these benefits are in the form of discounts at restaurants, movie theaters, zoos, museums, etc. You collect data and estimate t ...

Question what major factor causes the implicit price

Question: What major factor causes the implicit price deflator and the chained price deflator to diverge over time? Under what circumstances would we expect to find very little difference in these two measures of prices? ...

Question if the marginal cost of collecting garbage were

Question: If the marginal cost of collecting garbage were constant at $6 per pound, what would be the optimal level of garbage collection? The response must be typed, single spaced, must be in times new roman font (size ...

Question a website offers a place for people to buy and

Question: A website offers a place for people to buy and sell emeralds, but information about emeralds can be quite imperfect. The website then enacts a rule that all sellers in the market must pay for two independent ex ...

Question in emerging markets such as india consumers shop

Question: In emerging markets such as India, consumers shop far more frequently than in most Western countries, often daily. As a result, consumers there have many more chances to switch brands. What does this buying beh ...

Question consider the following cost information for a firm

Question: Consider the following cost information for a firm that operates in a perfectly competitive market.   Labor is a variable input.    Q (quantity of output) Total cost ($) 0 3 2 5 4 9 6 15 8 23 10 33 12 45 (1) Ca ...

Question savers are taxed on the nominal interest payments

Question: Savers are taxed on the nominal interest payments they receive rather than the real interest payments. Suppose the federal government shifts from taxing nominal interest payments to taxing only real interest pa ...

Question how does the existence of money reduce the costs

Question: How does the existence of money reduce the costs of making transactions, relative to a society based entirely on barter? English is becoming the usual language for international transactions, even if the langua ...

Question illustrate graphically the monopolists profit

Question: Illustrate graphically the monopolist's profit maximization problem. Include the monopolist's profit-maximizing price and level of output, any consumer surplus, any producer surplus, and any deadweight welfare ...

  • 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

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As