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

What is the difference between economics and business, What is the differen...

What is the difference between economics and business?  Economics is the study of how we, the people, engage ourselves in production, distribution and consumption of goods and

Effects of advertising on the demand curve, The Effects of Advertising on t...

The Effects of Advertising on the Demand Curve: Advertising targets to: • Change the slope of the demand curve which means make it more inelastic. This is done by generat

Production possibility curve, In 1939 the U.S. economy was operating where ...

In 1939 the U.S. economy was operating where in the production possibility curve?

Describe positive and a negative externality, 1). Define and explain the co...

1). Define and explain the concept of an externality. Provide examples of both positive and a negative externality. 2). The Prisoner's Dilemma Exercise:

Egyptian Labor Market.., How to use Demand and Supply tools to analyze the ...

How to use Demand and Supply tools to analyze the case of the Egyptian labor market?

What is gini coefficient, Q. What is Gini Coefficient? Gini Coefficient...

Q. What is Gini Coefficient? Gini Coefficient: A statistical measure of inequality. A Gini score of 0 signifies perfect equality (in which each individual receives the same inc

Demand Forecasting, what is demand forecasting and defines its techniques

what is demand forecasting and defines its techniques

Capital intensive operations, Where minimum efficient scale is very huge fo...

Where minimum efficient scale is very huge for capital intensive operations, it may be more cost effective to allow one company to spread its fixed costs over a very huge number of

Whata are the non-renewable resource, How does the approach of someone who ...

How does the approach of someone who has adopted the precautionary principle differ from someone with a blind faith in substitutability, when it comes to a non-renewable resource l

Risk and gambling, John has a utility function given by U(M) = M0.5, where ...

John has a utility function given by U(M) = M0.5, where M represents an amount of cash prize in a game. If John wins, with the probability of 0.2, he will get $900; otherwise, he g

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