Reference no: EM131355898
1) What is the difference between The Cardinal Utility Theory (TUC) and The Ordinal Utility Theory (TUO).
2) Walmart firm is one of the largest malls in USA that specialized in marketing and selling various types of goods , the management decides to measure its consumers Equilibrium for meat and chocolate consumption with regard to their incomes ,the firm makes its research and find the total utility(TU) for the goods as shown in the table below. Answer the following questions: (assumptions: Income = 50$, Price of chocolate = 4$ per unit, Price of meat = 6$ per unit, P: Price for product,
TU: Accumulative Total utility, MU: Marginal utility)
a. Fill the columns MU (Marginal utility), MU/P for both goods.
b. Find out the optimum combinations that may satisfy the highest utilization.
c. Find the total utility for the combinations.
d. Find the highest utilization combination based on the customer's income
See Chart
|
Quantity (Meat)
|
TU
|
MU
|
MU/P
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Quantity (Chocolate)
|
TU
|
MU
|
MU/P
|
|
1
|
5
|
|
|
1
|
8
|
|
|
|
2
|
9
|
|
|
2
|
9
|
|
|
|
3
|
11
|
|
|
3
|
12
|
|
|
|
4
|
13
|
|
|
4
|
14
|
|
|
|
5
|
18
|
|
|
5
|
18
|
|
|
|
6
|
20
|
|
|
6
|
25
|
|
|
|
7
|
28
|
|
|
7
|
27
|
|
|
|
8
|
34
|
|
|
8
|
31
|
|
|
e) Sketch the budget line.
3) Based on the table below for Walmart firm, Find Marginal Rate of Substitution (MRS) and sketch the indifference curve:
|
Goods
|
Quantity (1)
|
Quantity (2)
|
Marginal Utility (MU)
|
MRS
|
|
Chocolate
|
2
|
15
|
20
|
|
|
Biscuit
|
4
|
9
|
20
|
|
|
Meat
|
8
|
8
|
20
|
|
|
Chicken
|
12
|
1
|
20
|
|
4) Sketch the Income-consumption curve (ICC) suppose the income changes for 4 months were 220$, 280$, 320$, 330$ and the prices of chocolate, meat were 20$, 50$ respectively and fixed.
5) Identify the law of Demand and the different types of demand and the exceptions to the law of demand.
6) Sketch the ISOQUANT graph for a firm that has the production function:
Q = (KL)0.25, Such that Q = 10, K: Capital, L: Labor
7) Suppose that chocolate are produced according to the Cobb-Douglas function:
Q = 5K0.1L0.9
a. What is the return on scale for this production function and justify your answer.
b. What is the return on scale for the production function if the management decides to double capital (K) and Labor (L), Show your work.
8) What is the price discrimination, and identify its types and conditions.
9) Monopoly, Duopoly and Oligopoly are different market structures, identify each structure and compare between them?
10) Find the price elasticity of demand If the price of meat changed from $5 to $3 and the amount that single customer buy increased from 2 to 3 kilograms per week ,what is the type of elasticity of demand.
11) HP, one of the largest technology industry equipment firms worldwide, has decided to increase production and return such that they intend to restructure their firm and change the factors of production, use the information filled in the table below to find:
a. Find the marginal product and average product.
b. Determine which changes result in increasing, diminishing, negative returns.
|
No of Workers
|
Total Product
|
Marginal Product |
Average Product |
|
1
|
162
|
|
|
|
2
|
276
|
|
|
|
3
|
420
|
|
|
|
4
|
580
|
|
|
|
5
|
750
|
|
|
|
6
|
912
|
|
|
|
7
|
1056
|
|
|
|
8
|
1170
|
|
|
|
9
|
1242
|
|
|
|
10
|
1260
|
|
|
|
11
|
1212
|
|
|
|
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