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

Chapter 7, a firm has fixed costs of $60 and variable costs as indicated at...

a firm has fixed costs of $60 and variable costs as indicated at the bottom of this page. complete the table and check your calculations

Oligopoly, what are the factors causing oligopoly market?

what are the factors causing oligopoly market?

Natural rate of unemployment, Natural Rate of Unemployment: According to ne...

Natural Rate of Unemployment: According to neoclassical economics, wage rate is determined by a process of labour-market clearing (in which employers and workers compete with each

Externalities, What are externalities? Give an example of positive and nega...

What are externalities? Give an example of positive and negative externality and explain why the market outcomes are inefficient in the presence of externalities?

Business cycle, measures to control business cycle

measures to control business cycle

ENVIRONMENTAL POLLUTION TYPES, Pollutant Any substance, species produc...

Pollutant Any substance, species produced either by a natural source or by human activity, which produces very adverse effect on the environment is called pollutant. Some commo

What are constant returns to scale, What are constant returns to scale? ...

What are constant returns to scale? Constant returns to scale: A constant return to scale (CRS) implies that doubling inputs precisely double outputs, which is frequently a

Organic protons and electrons, Organic biochemistry is really as well as bi...

Organic biochemistry is really as well as biochemistry. This is because the as well as atom is the central source of all existing creature's substances. 8 protons and 8 electro

2 econ problems, I have the answers to these two questions, but I need to k...

I have the answers to these two questions, but I need to know HOW to get these answers. Thanks. Question 1 Suppose there are two goods beverage and pizza and two inputs land, T

Cost analysis, What is cost analysis? Cost–benefit analysis known as CBA, s...

What is cost analysis? Cost–benefit analysis known as CBA, sometimes known as benefit–cost analysis BCA, is a systematic process of calculating & comparing profit and costs of a pr

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