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BUS 201 Microeconomics Assignment

Assignment Help Microeconomics
Reference no: EM132572668

BUS 201 Microeconomics - Emirates College of Technology

Learning outcome 1: Describe the production possibilities frontier and relate its importance to utilizing firms' economic resources efficiently.

Learning outcome 2: Analyze and coordinate the activities of a firm by using the theory of the firm.

Learning outcome 3: Employ the costs, output concepts and revenue curves and their relationships in order to maximize the economic profits of firms.

Learning outcome 4: Use the characteristics of market structures to formulate market economic activities of the firm.Question 1: In the context of production possibilities frontier (PPF), explain production efficiency, including its definition and the meaning of unused resources and misallocated resources

1. Definition ofProduction Efficiency
2. Unused Resources and Misallocated Resources
a. Meaning of Unused Resources
b. Meaning of Misallocated Resources

Question 2: Answer the following questions:
1. Define the principal-agent problem and give examples
2. Explain the three solutions that companies use to solve the principal-agent problem:

Question 3: Answer the following questions:
A. In a perfectly competitive market, explain why each firm in this market is a Price Taker and define this concept; and explain what kind of a demand curve faces each firm in this market
1. Define and explain the concept of Price Taker
2. Demand curve for a perfectly competitive firm
B. Explain the two kinds of barriers to entry that exist in a monopoly.

Question 4: A firm has the following short-run production functions. The total fixed cost of the firm is AED 1,800. The firm pays a wage rate of AED 300 per day for each worker. The firm's only variable cost is the wages of workers. Calculate the following:

A. Calculate the Average Product of Labor and the Marginal Product of Labor by filling the empty cells in the following table

Number of Workers

Total Output (Product)     

(per day)

Average Product of Labor

APL

Marginal Product of Labor

MPL

0

0

-

-

1

40

 

 

2

75

 

 

3

105

 

 

4

130

 

 

5

150

 

 

B. Calculate the following:

1. The Average Fixed Cost (AFC) when the total output is 75 units.

2. The Average Variable Cost (AVC) when the total output is 75 units.

3. The Average Total Cost (ATC) when the total output is 75 units.

4. Calculate the Total Cost (TC) when the total output is 105 units.

Question 5: The Eastern Company pays each worker it employs a wage of AED 800. Each unit of output is sold at a price of AED 10. Answer the following questions:

Number of workers

Total Output

Marginal Product of Labor (MPL)

Value of Marginal Product of Labor VMPL = P x MPL

Wage per Worker W

Profit Margin (PM)PM=VMPL-Wage

0

0

-

-

-

-

1

140

140

 

800

 

2

260

120

 

800

 

3

360

100

 

800

 

4

440

80

 

800

 

5

500

60

 

800

 

6

540

40

 

800

 

A. Fill in the empty cells in the table.

B. State the condition that the firm should meet to maximize his profit.

C. How many workers should this firm employ to maximize his profits?

Verified Expert

The paper that I solved as my sample work was to emphasize on how can an entity ensure maximum utilization of its resources by being inside the production possibility curve. Solution for solving the agent-principal problem was discussed which will lead to a better relation between performance and output. The barriers for any new entrant in a monopoly market was also stated along with many practical problems solved for different ratios of cost and total output.The answers were written in Microsoft Office Word Document as asked for and well within the prescribed time limit.

Reference no: EM132572668

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len2572668

7/14/2020 5:24:47 AM

need to solve each question separately using the handouts attached and for the calculation question need to write the equation used then the steps how to got the answers. need to be delivery tomorrow morning urgently

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