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Andrew has preference given by: u(x,y) = min{2x, 3y} The price for good x and good y are identical and equal to 4. At his optimal consumption bundle he achieves a utility of 90. W
why we study micro econmics?
2) Proctor & Gamble (P&G) and the Lever Co. decide to form a laundry detergent cartel for future sales in Europe. Lever is more efficient than P&G. a)illustrate graphically how the
Value Added:Value added in a particular stage of production equals value of total output, less the value of intermediate products (comprising raw materials, capital equipment and o
How we constract the cost structure of firms
1. Why does inflation make nominal GDP a poor measure of the increase in total production from one to the next? How does the U.S' BEA deal with the problem inflation causes w
Total cost curve (TC) is obtained by adding up vertically total fixed cost and total variable cost curves because the total cost is sum of total fixed cost and total variable cost
Change in consumer and producer surplus from price controls * Observations: - The loss is equal to area B + C. - The change in surplus = (A - B) + (-A - C) = -B - C -
(i) Define the three types of price discrimination, clearly stating the different information requires of each type of discrimination. (ii) Find a real-world example of second-degr
Formal and Informal systems - MRP System Most production systems are full of 'pushes' and 'pulls'. The formal system issues orders, ie 'pushes'. The informal system tries to
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