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Question 1:
(a) Describe how asymmetric information influences the price system and resource allocation. Provide examples to support your answer.
(b) Managerial decision-making involves uncertainty and risk. Analyse the possible behaviours of managers towards risk.
Question 2:
(a) Distinguish between income elasticity, price elasticity and cross elasticity of demand.
(b) Show how the manufacturer of mobile phones can use the concept of elasticity in pricing decision.
Question 3:
(a) Compare and contrast the profit maximizing behaviour and output decision of the perfectly competitive firm and the monopolist in the long run.
(b) Explain three different models of oligopoly. Support your answer with appropriate examples.
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a. A major freeze destroys a large number of orange trees in Florida Ans- Since the freeze destroyed a large number of orange trees in Florida the number of oranges the selle
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how much output should a firm produce? 80$ per unit C(Q)=40+8Q+2Qsquared
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