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25 Microeconomics questions
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<p> d. XXXXX around XXX "X" XXXX. </p> <p><b>Answer (17)</b><b> – (A) s</b><b>hift XXXXXXX, parallel XX its XXXXXXX XXXXXXXX</b> </p> <p><b>Explanation:</b> Budget constraint XXXXXXXXXX the XXXXXXX quantities of goods / services a XXXXXXXX can buy XXXXX XXX income. The XXXXXXXX in XXXXXX XXXX XXXXX him XX XXX more. XX a XXXXXX, budget constraint XXXX XXXXX XXXXXXX. </p> <table> <tbody><tr> <td> </td></tr> <tr> <td> </td></tr> </tbody></table> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> </p> <p> <br> </p> <p> Figure for XXXXXXX 18 </p> <p>18. XXXX XXX XXXXXXXXXXXX XXXXXX in the XXXXXX above, XXXXX XX XXX following XXXXXXXXXX XX XXXXXXX? </p> <p>a. Point A XX XXXXXXXXX XXXXXXX XX XXXXX E. </p> <p>b. <b>Point X XX preferred equally XX point C.</b> </p> <p>c. XXX XXXXXX XXXXXXXXXX XXXX point X contains more XX-Ho's XXXX that associated XXXX XXXXX C. </p> <p>d. The bundles along XXXXXXXXXXXX curve I<sub>X</sub> XXX XXXXXXXXX to those along XXXXXXXXXXXX XXXXX I<XXX>2</XXX>. </p> <p><b>Answer (18)</b><b> – (B) XXXXX X XX XXXXXXXXX equally XX point C</b> </p> <p><b>Explanation:</b> Point X XX XXX preferred equally to point X XXXXXXX E XXXXXXXXXX XXXX quantities XX XXXX XXXXXXXX XXX XX-Ho. Combination XX XXXXX X XXXXXXXXXX XXXX XXXXXXXXXX XX Ho-Ho than twinkies. I<sub>X</XXX> XXXX XXX be preferable over I<XXX>2 </sub>because latter XXXXXXXX less quantity XX XXXX goods than I<sub>X</sub>. XXXXXXXXX, option (X) XX correct. </p> <p>19. XXXXXXX at $X the quantity demanded XXX the download XX Yo-Yo Ma’s music XXXX his “Piazzolla: XXXX of the XXXXX” XXXXX XX X XXXXX. If the XXXXXXXXXXXX XXXXXX of the price <u>decrease </u>from $5 XX $X XX X XXXX, and XXX income effect XX X songs, what impact XXXX the price change XXXX on XXX number of XXXXXX XXXXXXXXX XXXXXXXX XXXX XXX Piazzolla’s XXXXX? (2 XXXXXX) </p> <p><b>Answer (19)</b><b> – </b>As XXX relative price of a XXXX XXXXX, the substitution effect XXXXXXX that people XXX XXXX of that good XXX XXXX XX XXX substitutes. In this case, XXXXXXXXXXXX effect for XXXXX $2 XXXXXXXX in XXXXX is X song XXXXXXX XXXXXX XXXXXX XXX XXXXX $2 decrease in price is X XXXXX. It implies XXXX consumer will XXXXXXXXXX more XX XX-XX XX’s music as XXX XXXXX fall. The ultimate effect will be XXXX the XXXXX XXXX decrease XXX XXXXXXXX XXXXXXXX XXXX XXXXXXXX. </p> <p>20. XXX wants XX XXXXX his own business. The business he XXXXX XX start will require XXXX he purchase a factory that XXXXX $400,XXX. Joe XXXXXXXXX XXX $500,000 in XXX XXXX earning 3 XXXXXXX interest per year. XX XXX XXXXXXXXX XXX XXXXXXX with his own XXXXX, XXXX XX the annual <b><u>implicit opportunity XXXX</u></b> of purchasing XXX factory? </p> <p>a. $0 </p> <p>b. $3,000 </p> <p><b>c. $12,XXX</b> </p> <p>d. $15,000 </p> <p><b>XXXXXX (XX)</b><b> – (C) $XX,XXX</b> </p> <p><b>Explanation:</b> If XXX XXXXXXXXX XXXXXXX XXXX his own money he will only XXXX XXXXXXXX on remaining $100,XXX ($XXX,000 - $400,000). XXX interest of $XX,000 ($400,000 × X%) foregone will be the annual XXXXXXXX opportunity cost. </p> <p>21. A profit-maximizing XXXX will shut down in XXX XXXXX XXX XXXX </p> <p><b>a. price is less XXXX average variable XXXX.</b> </p> <p>b. price XX XXXX than XXXXXXX total cost. </p> <p>c. average revenue is greater marginal cost. </p> <p>d. XXXXXXX revenue is XXXXXXX than XXXXXXX fixed cost. </p> <p><b>XXXXXX (XX)</b><b> – (A) XXXXX is less XXXX XXXXXXX variable cost</b> </p> <p><b>XXXXXXXXXXX:</b> XX short XXX, XXXXXXX are maximized at a level of XXXXXX XXXXX XXXXXXXX XXXXXXX (MR) is XXXXX to the marginal XXXX (XX). XX a general XXXX, the XXXX will XXXXXXXX to XXXXXXX as long as price exceeds average variable costs. When XXXXX XX less XXXX average XXXXXXXX cost, XXX XXXX will shut down in the XXXXX-XXX as it cannot XXXXX XXX fixed XXXXX. </p> <p> XX. In the long run, all XX a XXXX's XXXXX are XXXXXXXX. XX this XXXX the XXXX XXXXXXXXX XXX a XXXXXX-maximizing XXXX XX XX </p> <p><b>a. shutdown XX XXXXX is less XXXX average XXXXX XXXX.</b> </p> <p>b. shutdown XX price is greater XXXX XXXXXXX total XXXX. </p> <p>c. shutdown XX average revenue is XXXXXXX XXXX XXXXXXX fixed XXXX. </p> <p>d. shutdown XX average XXXXXXX XX greater XXXX XXXXXXXX XXXX. </p> <p><b>XXXXXX (XX)</b><b> – (X) shutdown XX price is less XXXX XXXXXXX XXXXX XXXX</b> </p> <p><b>XXXXXXXXXXX:</b> Same XXXXXXXXX XX XXXXXXXXX in Answer XX above XXX XX XXXXXXX XXXX except XXXX in XXX long XXX XXX XXXXX XXX variable. XXXX XXXXX XX less XXXX XXXXXXX XXXXX cost XXX XXX positive XXXXXX XX output, the firm will make consistent XXXXXX XXXXX XXXXXXX in an eventual shut down. </p> <p>23. Because XXXXXXXX firms do XXX XXXX to compete with other XXXXX, XXX outcome in a market XXXX a XXXXXXXX is XXXXX </p> <p> a. XXX in XXX XXXX XXXXXXXX XX XXXXXXX. </p> <p> b. one that fails XX XXXXXXXX XXXXX XXXXXXXX XXXX-being. </p> <p> c. XXXXXXXXXXX. </p> <p> <b>d. XXX XX XXX XXXXX are XXXXXXX.</b> </p> <p><b>Answer (XX)</b><b> – (D) all XX XXX above XXX XXXXXXX</b> </p> <p><b>XXXXXXXXXXX:</b> XXXXXXXX causes inefficiencies XXXXXXX XXXX price is XXXXXXX XXX XXXX quantity XXX it is XXXXX XX improve the situation of only XXXXXXXX XXXXXX XXX not XXX society XX a XXXXX. XXX this XXXXXX, it XX XXXX XXX in the best XXXXXXXX of XXXXXXX. <br> </p> <p> </p> <p><i> </i></p> <p><i>XX. XX XXX XXXXXX XXXXX, XXX XXXXXXXX cost XXXXX for a XXXXXXXX XXXX XX XXXXXXXX XX XXXXX </i></p> <p><i>a. X. </i></p> <p><i>b. B. </i></p> <p><i><b>c. C.</b> </i></p> <p><i>d. X </i></p> <p><i> </i></p> <p><i><b>Answer (24)</b><b> – (C) Curve X</b> </i></p> <p><i> </i></p> <p><i><b>Explanation:</b> For a XXXXXXXX there is a XXXXX XXXXXX i.e., a monopolist XXXX XX reduce price in order to sell XXXXXXXXXX units. Therefore, marginal XXXX curve XXX XXXXXXXX market XX upward XXXXXXX XX XXXXXXXX costs XXXXX with XXX XXXXXXXX in output. XX XXX other hand, total cost XXXXXX for XXXXXXXXXX are XXXXXXXX XXXXXXX. </i></p> <p><i> </i></p> <p><i>25. XX XXX XXXXXX above, XXXXX cost curve XXX a monopoly XXXX is XXXXXXXX XX curve </i></p> <p><i>a. A. </i></p> <p><i><b>b. B.</b> </i></p> <p><i>c. C. </i></p> <p><i>d. X. </i></p> <p><i> </i></p> <p><i><b>Answer (25)</b><b> – (B) XXXXX X</b> </i></p> <p><i> </i></p> <p><i><b>XXXXXXXXXXX:</b> XXX explanation in XXXXXX XX. </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b></b> </i></p> <p><i><b>CONGRATULATIONS! XXX ARE XXXXXXXX. XXX REST XX XXXXXXXX</b> <b>XXXX X. XXXXX XXXXXX. You are <u>not XXXXXXXXX</u> XX XX XXXX section. To obtain XXXX XXXXX credit, you XXXX show XXX of your XXXX XXX XXXXXXXX XXXXXXXXX calculations. (XX XXXXXX)</b> </i></p> <p><i><b></b> </i></p> <p><i><b>X.X. 1: </b>XXXXXXX that XXXXXXX XX a XXXXXX-XXXXXX diagram, you XXX given XXX following information: </i></p> <p><i> </i></p> <p><i><i>Q </i><XXX>s</sub> = 100 + X###i</i></p> <p><i>/i### </i></p> <p><i><i>Q </i><sub>d</XXX> = 400 - 2###i</i></p> <p><i>/i### </i></p> <p><i> </i></p> <p><i>XXXX XXXX XXXXXXXXXXX XXXXXXX XXXXXXXXXXX XXXXX and quantity. (X points) </i></p> <p><i> </i></p> <p><i><b>XXXXXX (XX-1)</b><b> </b> </i></p> <p><i> </i></p> <p><i>XXX XXXXXXXXXXX XXXXX will be the point where X s = Q d. XXXXXXXXX, </i></p> <p><i> </i></p> <p><i>XXX + 3P = XXX – XX </i></p> <p><i>XX + 2P = XXX – 100 </i></p> <p><i>5P = XXX </i></p> <p><i>X = XX </i></p> <p><i> </i></p> <p><i><b>XXX equilibrium XXXXX XX therefore XX per unit.</b> </i></p> <p><i> </i></p> <p><i>XXXXXXXXXXX quantity can now XX XXXXXX out by XXXXXXX XXX XXXXX of X XXX solving for X. XXXXX, </i></p> <p><i> </i></p> <p><i>Q s = 100 + 3(60) </i></p> <p><i>= XXX + XXX </i></p> <p><i><b><u>= 280 Units</u></b> </i></p> <p><i>Or; </i></p> <p><i>X d = 400 – X(XX) </i></p> <p><i>= XXX – XXX </i></p> <p><i><b><u>= XXX XXXXX</u></b> </i></p> <p><i> </i></p> <p><i><b>XXXXXX maximizing quantity XX XXX XXXXX.</b> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i> </i></p> <p><i><b>E.C. 2: </b>XXXXXX a graph XXXXXXXXXXXXX the circumstances XXXX XXXXX XXXXXXX in a XXXXXXXXX XXXXXXXXXXX market XXXXX XXXXX XXX experiencing XXXXXXXX XXXXXX. XXXXXXXX XXXXX, XXXXXXX, and XXX XXXXXXXX losses XX your XXXXX. Using your graph, XXXXXXXXX whether an XXXXXXXXXX firm will XXXX down in XXX short XXX, or choose XX remain in XXX XXXXXX. Explain your XXXXXX. (X XXXXXX) </i></p> <p><i><b></b> </i></p> <p><i><b>XXXXXX (XX-2)</b> </i></p> <p><i>To determine whether or not an individual XXXX XXXX shut XXXX in the XXXXX XXX, revenues XXX average XXXXXXXX XXXXX needs XX be XXXXXXXX. XX XXX XXXXX run, a XXXX can choose to stay in XXX XXXXXX as long as its average XXXXXXXX cost is XXXXX Po. XXXX it rises XXXXX XXX Po XXXXX, the firm will XXXX XXXX in the XXXXX XXX. </i></p> <p><i> </i></p> <p><i><b><i></i></b><i> </i></i></p> <p><i><i><i> </i></i></i></p> <p><i><i><i><b>E.C. X: </b>XXXXX XXX been much XXXXXXXXXX XX deregulating electricity XXX XXXXXXX XXX delivery companies in the XXXXXX XXXXXX. Using XXXX XXXXXXXXXXXXX of monopolies, discuss the XXXXXX effect XX XXXXXXXXXXXX on prices in XXXXX XXX XXXXXXXXXX. (2 XXXXXX) </i></i></i></p> <p><i><i><i> </i></i></i></p> <p><i><i><i><b>XXXXXX (XX-3)</b> </i></i></i></p> <p><i><i><i>The main objective XX a XXXXXXXXXX XX XX XXXXXXX minimum XXXXXXXX XXXXXX XXXXX and charge the XXXXXXX possible XXXXX. Whether or XXX Electricity and XXXXXXX gas monopolies in United XXXXXX XXXXXX XX deregulated depends primarily XX the likely XXXXXX XX competition. XX the market XX competitive, XXXXXXXXXXXX will XXXXX reduction in price and provide XXXXXXXX XXXXXXXXXXXX XX lower and XXXXXX XXXXXX XXXXXXXXX. XXXXXXX, XX XXXXXX XX not XXXXXXXXX competitive, it XXXX XXXXX inefficiency i.e., XXXXXXXXXX will be XXXXX and XXXXX will XX XXXXXX in some areas. Furthermore, it will also XXXX government XXXXXXXX. To XX effective, XXXXXXXXXXXX should result in increasingly XXXXXXXXXXX markets.</i></i></i></p> <p><i><i><i><br></i></i></i></p></i></i>">
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