User Account

All Pages

tut10, Microeconomics

Assignment Help:
3. You plan to sell a sunglasses clip that you can attach to a car''s sun visor. You can purchase the goods from a wholesaler at $2 a piece and there is an overhead cost of $500 per week. The amount you sell depends on how hard you work. Specifically, the amount you sell per week will be 20 times the number of hours you put in per week. Your opportunity cost of the first 10 hours is $200. It is $300 for the next 10 hours, $500 for the next 10, and $800 for the next 10 hours.
(a) Construct your supply curve for the sunglasses clips.
(b) If you can sell these in a competitive market at $5 per clip, then how many will you sell?
(c) If the market is perfectly competitive in the long run, what will happen to the price and your profit over time?
(d) Argue that a price of $4.50 could be part of a long run competitive equilibrium.



4. Suppose that the government requires beer drinkers to pay a tax of $2 on each carton of beer purchased.

(a) Draw a supply and demand diagram of the market for beer without the tax. Show the price paid by consumers, the price received by producers and the quantity of beer sold. What is the difference between the price paid by consumers and the price received by producers?

(b)Now draw a supply and demand diagram of the market for beer with the tax. Show the price paid by consumers, the price received by producers and the quantity of beer sold. What is the difference between the price paid by consumers and the price received by producers? Would your answer change if the tax was imposed on producers instead?



5. You find from your accountants that the marginal cost of production is constant at $35 per unit if you sell up to 100 units, then it falls to $30 per unit for between 101 and 150 units. Between 151 and 200 units the marginal cost is only $20. For more than 200 units, the marginal cost will be at least $40 per unit.


(a) If you sell in a competitive market at a price of $28, then how much will you produce to maximise your profit?

6. Suppose there are two roommates, 1 and 2. They are trying to decide whether or not to purchase a TV. Given the size of their apartment, the TV will necessarily go in the living room, and both roommates will be able to watch it. Thus, there is no way for one of the roommates to exclude the other from watching the TV. Assume that each roommate has a wealth of $500, and that each person values the TV at $100, and that the cost of the TV is $150. Also suppose that each roommate will decide independently whether or not to buy the TV.

(a) Write this situation as a game where the choices for each roommate are to buy or not buy the TV.

(b) Find the Nash equilibrium.

(c) Can they do better than the Nash equilibrium?

Related Discussions:- tut10

Consumer equilibirium, diagrammatically condition of consumer equilibirium

diagrammatically condition of consumer equilibirium

Supply function, given the cost function as C=0.3Q3-2Q2+13Q+25,find the sup...

given the cost function as C=0.3Q3-2Q2+13Q+25,find the supply function

Price change, 1.  Seller has ample time to adjust to price change. 2.  B...

1.  Seller has ample time to adjust to price change. 2.  Buyer's response to small price change is significant. 3.  Buyers are faced with many options when deciding to make a

Bonds, Contribution of bonds in n economy.

Contribution of bonds in n economy.

Computers, During the 1990s, technological advance reduced the cost of comp...

During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use of supply and demand diagrams, how the following markets are affected in terms of

Supply and demand of coffee and tea, Three factors that determine demand fo...

Three factors that determine demand for coffee and tea

Homework, the difference between an lc3 and other types of businesses is th...

the difference between an lc3 and other types of businesses is that

Regression methods, This is a very common methods of forecasting demand. Un...

This is a very common methods of forecasting demand. Under this methods a relationship is established between quantity demanded( dependent variable) and independent variables such

Explain how normal profit and abnormal profit differ, Explain how normal pr...

Explain how normal profit and abnormal profit differ. Normal profit (breakeven) - which must contain commentary on the inclusion of opportunity costs. Abnormal profit should be

Transfer payments, Transfer Payments: Governments typically redistribute a ...

Transfer Payments: Governments typically redistribute a share of tax revenues back to specified groups of individuals in form of several social programs (like welfare benefits, pub

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd