Reference no: EM132889932
BUS 201 Microeconomics - Emirates College of Technology
LO 1: Describe the production possibilities frontier and relate its importance to utilizing firms' economic resources efficiently.
LO 2: Construct the supply and demand curves and interpret them to understand market forces.
LO 3: Employ the costs, output concepts and revenue curves and their relationships in order to maximize the economic profits of firms.
LO 4: Use the characteristics of market structures to formulate market economic activities of the firm.
Question 1:
Classify these firms into adequate market structure and explain your classification.
(1) Firms for sporting and athletic goods
: Such firms fall under MONOPOLISTIC COMPETITION market structure.
• WHAT IS MONOPOLISTIC COMPETITION
Question 2: Suppose that ABC firm has 100 hours of labor a day used to produce snacks and swimming classes.
The data below presents the maximum quantity of each good produced.
|
Labor (hours)
|
Swimming classes
(classes per week)
|
|
snacks
|
|
0
|
0
|
or
|
0
|
|
20
|
4
|
or
|
10
|
|
40
|
8
|
or
|
18
|
|
60
|
12
|
or
|
24
|
|
80
|
16
|
or
|
28
|
|
100
|
20
|
or
|
30
|
Explain if ABC firm can produce 8 classes and 28 snacks per week?
Suppose that ABC firm produces 8 swimming classes and 18 snacks per week, explain if this production is efficient.
Suppose ABC produces 16 classes and 10 snacks a week. Does it face a tradeoff? Explain
Question 3:
The table below shows ABC firm short-run production function. The company hires workers at a wage rate of $400 a day and his total fixed cost is $1000.
|
Labor
(workers)
|
Total product
(output)
|
|
0
|
0
|
|
1
|
12
|
|
2
|
25
|
|
3
|
30
|
|
4
|
44
|
|
5
|
50
|
Calculate the average total cost of producing 25 units.
Calculate total cost of producing 47 units.
Calculate average variable cost if 30 units are produced.
Calculate the marginal product of producing 44 units.
Calculate average product of the 4th worker
Question 4 : Fill in the below table, the wage equals AED 300 for each worker. In addition, each unit of output is sold at a price of AED 10.
|
Number of workers
|
Total Output
|
Marginal Product of Labor (MPL)
(Change in Q)
|
Value of Marginal Product of Labor VMPL = P x MPL
|
Wage per Worker W
|
Profit Margin (PM)PM=VMPL-Wage
|
|
0
|
0
|
-
|
-
|
-
|
-
|
|
1
|
60
|
|
|
300
|
|
|
2
|
110
|
|
|
300
|
|
|
3
|
150
|
|
|
300
|
|
|
4
|
180
|
|
|
300
|
|
|
5
|
200
|
|
|
300
|
|
|
6
|
210
|
|
|
300
|
|
Question 5: Explain the impact of COVID19 Pandemic on Household demand and firms supply. Defend your analysis with real life examples.