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# Microeconomics

### Profit Maximizing Quantity and Price

Suppose a monopolist faces demand P=400-4Q^d and has a constant marginal cost MC=80. Graph, Demand, Marginal Revenue, and Marginal Cost. Find Profit Maximizing Quantity and Price the monopolist will charge.

### NPV

A proposed project should be accepted if the net present value is a. positive. b. negative. c. larger than the internal rate of return. d. smaller than the internal rate of return.

### Consumer Surplus Analysis

Please help me with the given microeconomics problem for an assignment: There are six potential consumers of computer games, each willing to buy only one game. Consumer 1 is willing to pay \$40 for a computer game, consumer 2 is willing to pay \$35, consumer 3 is willing to pay \$30, consumer 4 is willing pay \$25, consumer 5 is

### On Thursday nights, a local restaurant has a pasta special.

On Thursday nights, a local restaurant has a pasta special. Ari likes the restaurant's pasta, and his willingness to pay for each serving is shown in the accompanying table. Quantity of pasta (Servings) Willingness to pay for pasta (per serving) 1 \$10 2

### The point of efficient consumption

Suppose the marginal utility per last dollar spent on hamburgers is greater than the marginal utility per last dollar spent on chocolate malts. Assuming a consumer purchases only hamburgers and malts, what should the consumer do if she wishes to increase her total utility from the consumption of these two goods? Why?

### Mutual interdependence means that

Mutual interdependence means that a. all firms are price takers. b. each firm sets its own price based on its anticipated reaction by its competitors. c. all firms collaborate to establish one price. d. all firms are free to enter or leave the market.

### governmental health care funding

Some economists have argued that if the government wishes to subsidize health care, it should instead provide predetermined sums of payments (based on the type of health care problems experienced) directly to patients, who then would be free to choose their health care providers. Give an economic rationale for this approach to

### Which of the following is not true about the law of diminishing returns?

Which of the following is not true about the law of diminishing returns? a. It is a short run phenomenon. b. It refers to diminishing marginal product. c. It will have an impact on the firm's marginal cost. d. It divides Stage I and II of the production process. e. All of the above are true.

### Command Process - Example

5. Which of the following is the best example of the "command" process? a. MCI-Worldcom buys Sprint. b. Striking auto workers force General Motors to shut down its factories. c. Banks raise their fees on late payments by credit card holders. d. The FCC requires local telephone companies to provide ac

### Effect of Increase in Per Capita Disposable Income.

Please help with the following problems. Q= 400 - 3P + 4I + 0.6A Q=quantity demanded P=price I= per capita disposable income A= advertising expense Population is constant 1) Over the next 10 years per capita, disposable income is expected to rise by \$5,000. What effect will this have on the firm's sales?

### Economics

How do the payroll taxes levied on the earnings of workers affect their decisions about how much leisure they consume? When the government taxes younger people to pay benefits to older people, how does this affect the amount of assistance that younger people might voluntarily choose to offer older people? When the governme

### Profit maximization for a perfectly competitive firm

8. Problem-solving question: Use the following data for a perfectly competitive firm and the profit-maximizing input-combination rule to identify how many workers the firm will employ to maximize profits. a) Number of Workers (L) MRPL MRCL 0 0 0 1 \$40 \$20 2 70 20 3 40 20 4

### Optimal Revenue, Price vs. Capacity Problem

On an air rout, an ailine offers two classes of service: busienss (B) and economy (E). The respective demands are given by: For B - P= 540-.5Q For E - P= 380-.25Q Because of ticketing restrictions business travelers cannot take advantage of economy's low fare. The airline operates two flights daily. Each Flight has a

### Expected Monetary Value: Leasing Versus Drilling

Please help with the following problem. One day a representative of a natural gas company comes to your home and expresses interest in obtaining the mineral rights (including natural gas) to your 1,000-acre homestead. They offer you a flat fee of \$10,000 plus and additional \$50,000 if they discover gas. You have the option

### Unit Labor Cost Growth Rate

Cost for a good has increased from \$80 to \$100 per unit over the previous three years. A person thinks that importing the product from foreign suppliers at a cost of \$115.90 per unit may soon be desirable. A. Calculate the companies unit labor cost growth rate using the constant rate of change model with continuous compoundin

### Microeconomics

Suppose you are a college admissions director and every year you receive 5,000 applications for admission to your school while your school only has 1,000 slots open. Your school is prestigious and has a reputation for producing some of the best and brightest college graduates on the national market. ASSUME that there is NO possi

### Determine Optimal price & Marginal revenue functions

The company has the choice of selling tickets to its concerts or of selling CDs. Let P1 and Q1 be the price and quantity of concert tickets. Similarly, let P2 and Q2 be the number of CDs. The demand for Concerts is P1=100-12Q1+P2 and the demand for CDs is P2 = 50-3Q2+0.5P1. The marginal cost of selling a concert ticket is 0 and

### Opportunity Cost of Going Out for Pizza Night

The alternatives to going out for pizza with my family last night which cost me \$30 were: we could have gone to the movies for \$30, I could have bought a new C set of my favorite rap group for \$25, I could have bought a new sweater for \$27, we could have stayed home to watch television virtually for free, or I could have paid do

### Competitive Market vs. Monopolisitc Pricing

A FIRM IN A COMPETITIVE MARKET MODEL TENDS TO MAKE ZERO ECONOMIC PROFITS WHEN CHARGING A PROFIT MAXIMIZING PRICE AND A MONOPOLIST HAS NO LIMIT TO THE AMOUNT OF PROFITS THAT CAN BE EARNED WHEN THEY CHARGE THE PROFIT MAXIMIZING PRICE. WHY IS THAT?

### Marginal & Average Cost Curve

A) If the government imposes a \$1 per-unit tax, how do the marginal, average total, and average variable costs change? What if instead the government imposes a \$100 per-firm tax? (ASSUME NO CHANGE IN THE AMOUNT OF SALES.) B) Why are short-run marginal cost curves expected to slope upward? C) If you know that average cost

### Economics of a Merger

Consider a market that is initially served by two firms, each of which charges a price of \$10 and sells 100 units of the good. The long-run average cost of production is constant at \$9 per unit. Suppose a merger will increase the price to \$14 and reduce the total quantity sold from 200 to 150. A. COMPUTE -- What is the consu

### What problems might you encounter as the admission's director? REMEMBER this is not a law course - so avoid discussing those issues.

Suppose you are a college admissions director and every year you receive 5,000 applications for admission to your school while your school only has 1,000 slots open. Your school is prestigious and has a reputation for producing some of the best and brightest college graduates on the national market. ASSUME that there is NO possi

### Cost Curves

A) If the government imposes a \$1 per-unit tax, how do the marginal, average total, and average variable costs change? What if instead the government imposes a \$100 per-firm tax? (ASSUME NO CHANGE IN THE AMOUNT OF SALES.) B)Why are short-run marginal cost curves expected to slope upward? C)If you know that average costs are

### Life Cycle Income Explained with Human Capital Theory

Using the economic theory of Human Capital, describe and explain the theoretical basis for income changes over the life cycle. In other words, why it is that earnings increase at a decreasing rate, as one ages (why are returns diminishing - as is observed empirically)?

### Dominant strategy for purchases

Daaz Hagen and Jerry Ben's are both trying to decide what kind of ice cream machines to purchase. The profits earned by the two firms in each possible outcome are listed below with Daaz Hagen profits listed first in each cell. Suppose that the two firms are going to make their purchases at the same time. a. Does either firm

### Profit maximization

Canada Times Monthly is considering two ways of selling monthly print publication. One is to offer it on newstands at given price per issue. The second is to offer it as package of 12 issues for one annual subscription price. Research shows that the publication has 100,000 potential customers who are likely to value six of the t

### Fixed and Variable Cost Analysis.

A. Fill in the blanks in the following table. b. Draw a graph that shows marginal cost, average variable cost, and average total cost, with cost on the vertical axis and quantity on the horizontal axis. units of out put- fc- var cost- total cost- marginal cost- avg fixed cost - avc- avg total cost 0

### Scenario assessment and regulation unregulated impact to economic model

Consider a situation where a city is considering services from one cable provider in a given area. Given the demand and total cost functions of P = 28 - 0.0008Q TC = 120,000 + 0.0006Q2 Where Q is number of cable subscribers and P price in dollars of monthly cable service. 1. How many cable subscriber

### Wage or Salary Guidelines

Does the US Army have wage and salary increase guidelines? If so, explain the guidelines, and indicate how closely they are followed. If your organization does not have wage and salary increases guidelines, set forth and explain your own guidelines that could aid your organization's management.

### Maximize Profit Functions

If total cost in \$ is given by C(x) = 2x^2 + 4x + 50 and total revenue in \$ is given by R(x) = 100x where x is units, find the a. Profit function: b. Marginal Profit Function: c. x that maximizes profit: d: Maximum Profit: