Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Micro Economics - Assignment Example

Comments (0) Cite this document
Micro Economics Assignment Question 1 a) The diagram below shows the production possibilities curve. The production possibilities curve is based on the following assumptions: 1) Full employment 2) Resources are fixed in supply 3) The technology is fixed and there are only two goods b) It can be determined from the table that the cost of one more automobile when the economy is at point C is 9/2= 4.5 forklifts…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.2% of users find it useful
Micro Economics Assignment
Read TextPreview

Extract of sample "Micro Economics"

Download file to see previous pages c) If the economy is using the resources as stated in the question then it is underutilizing the resource availability. In this case it would violate the assumption of full employment. d) This is an unrealistic situation and can be attained only in presence of foreign trade. In order to produce beyond the possibility level, the economy must be able to realize the increase in the availability of resources. Question 2 Answer: Opportunity cost is referred to as the cost of an activity which in measured in regards to the next best alternative foregone. The condition of shortage is the root cause of opportunity cost. If shortage is absent there will be no reason to sacrifice one thing to achieve another. The opportunity cost is likely to be higher for New York City. The reason being the alternative uses for the block are of more value than the block of the suburban city. Question 3 Total Profits = Total Cost – Total Revenue Total Cost = P resource * Q resource and Total Revenue = Price * Q sold Total Cost = ($40 * 5 units of labor) + ($60 * 7 units of land) + ($60 * 2 units of capital) + ($20 * 1 unit of entrepreneurial ability) = $200 + $420 + $120 + $20 = $760. Total Revenue = $2 * 400 loaves of banana bread = $800. Total Profits = $800 - $760 = $40. The firm will continue to produce as it is earning economic profits. If this firm is typical of the banana bread industry, more resources will flow toward banana bread as other potential firms are attracted to the economic profits in the industry. Question 4 a) For this condition the price will rise while the quantity will fall. b) For this condition the price will fall while the quantity will fall as well. c) For this condition the price will fall while the quantity will rise. d) For this condition the price is indeterminate but the quantity will rise. e) For this condition the price will rise as well as the quantity. f) For this condition the price will fall but it is not possible to determine the demand. g) For this condition the price will rise but it is not possible to determine the quantity. h) For this condition the price will remain indeterminate but the quantity will fall. Question 5 Price falls and demand is inelastic: The total revenue will decrease in this case as demand being inelastic a price fall will bring loss of revenue for the producers. Price rises and supply is elastic: The total revenue will increase in this case as supply being elastic a rise in price will lead to increase in total revenue conditions. Price rises and supply is inelastic: The total revenue will rise in this case as well as this is the opposite case as the above question. Supply being inelastic a price rise will lead to increase in demand conditions and therefore total revenue. Price rises and demand is inelastic: The total revenue will rise in this case. Demand being inelastic a rise in prices will lead to rise in demand and total revenue will rise. Price falls and demand is elastic: The total revenue will rise in this case. As demand is elastic a fall in price will lead to increase in demand and total revenue will rise. Price falls and demand is unit elastic: In this case the total revenue will remain the same because a fall in price will bring no change in demand conditions and therefore total revenue will remain unaffected. Question 6 Answer: A ceiling on price that is set below the price level at ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Micro Economics Assignment Example | Topics and Well Written Essays - 1250 words”, n.d.)
Micro Economics Assignment Example | Topics and Well Written Essays - 1250 words. Retrieved from
(Micro Economics Assignment Example | Topics and Well Written Essays - 1250 Words)
Micro Economics Assignment Example | Topics and Well Written Essays - 1250 Words.
“Micro Economics Assignment Example | Topics and Well Written Essays - 1250 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Micro Economics Assignment

Financial Markets and Economics

As of the staff of the Indonesian mine, a thorough evaluation of the existing resources should be conducted regarding all levels of the working area (from the management team to the worker).
b. The acquisition should create a competitive advantage for TCC mainly for the following reasons: 1. This mine should be the first offshore production base for TCC, a fact that could help towards the reduction of the company’s dependence on domestic mines, 2. The transport of the material from the specific mine is easier due to the absence of issues like the rail or port bottleneck, 3. Currently, the mine has a positive performance with a tendency for more growth (an export authorization for 20% more tonnage was granted this year)...
12 Pages(3000 words)Assignment

International Business Economics

According to Adam Smith, the absolute advantage would be realised as long as the cost of production differed from between countries, one or both countries would gain by trading. An example to illustrate this is a situation where we have two countries A and B which produce two similar goods X and Y. The figures show labour cost in hours for producing one unit of a good

David Ricardo formulated the theory of comparative advantage and argued that even if one country is more productive in both lines of production it would be still profitable to trade. Country A is more productive in both lines of production but it will still be profitable to trade with country B, this is shown by first stating that country A is more advanta...
6 Pages(1500 words)Assignment

Business Economics: Small and Medium

The entry of small firms into the global markets has proven to be the main aspect of the creation of economies of scale. Markets are fast evolving to the needs of varied tastes and customer preferences, so necessary knowledge and technology asset has a major role to play for small firms to rise and to match up to the situation. However, small firms are characterized by “smallness of the market share (a large number of similar-sized firms) and hence lack of individual market power, corresponding to the theoretical concept of Pure Competition.” (Waite 1973. P. 154).

They need to overcome the handicap of smallness by strategic alliances and mergers with larger or technically more competent entities. Small firms...
10 Pages(2500 words)Assignment

Assumptions of Classical Economics which Do Green Critics

...What assumptions ical economics do green critics draw into question and what are the political consequences of the green approach?   Green economics is all about how economy is dependent on its natural surroundings and how it is a component of the natural world. It considers that the non-human things such as plants, the atmosphere and the earth sciences also have a direct relation to economics and are affected by economic deals and should be regarded as stakeholders. Green economics believes that everything which exists on the Earth has a connection with the rest of the species or nature. It believes that resources are limited and one can not extract uses from them unlimitedly. It also states that one cannot expand in a limited space...
8 Pages(2000 words)Assignment

Economics or Ethics

Several CEOs in America have in coalition with top managers deviated from the norms of corporate governance and caused immeasurable woes to the stakeholders. Using their power and ego they chased the wealth for personal gains without any concern for the shareholders or other stakeholders of the company. Enron, the world’s largest energy trader at one time, had to file bankruptcy under Chapter 11 when about 5000 workers lost their job (Bhattacharya, 2004). Arthur Anderson, one of the big five auditing firms was charged to have colluded with the management to misappropriate funds and project a picture different from the reality. Income was inflated and then all concerned papers were destroyed. The leadership at Enron was conce...
6 Pages(1500 words)Assignment

Real Estate Economics

...Real e economics: Introduction: The real e industry is engaged in leasing, renting, selling of real e and buying real e on behalfof others. The real estate industry comprises of the owners of the estates, the users who are the consumers, the developers who build, the renovators who refurbish buildings and the facilitators who enable sale of real estate, the facilitators comprises the financers example banks, the brokers and lawyers. According to July statistics this year the industry employs over 2125 thousand and the hourly wage rate is estimated to $16.37. This paper discusses the real estate industry on the basis of demand, supply, elasticity of demand and supply, wage rates and wage inequality, how monetary and fiscal policies affect...
7 Pages(1750 words)Assignment

Managerial Economics and Business Environment

Once the above said subject matter is clearly sorted out, the next emphasis would be on the concepts like the opportunity costing, incremental principle, marginal principle, discounting principle, the principle of time perspective, and calculation of economic profit as the guidelines to the scope of managerial economics. (Surender. V, 2008).
To start with, we consider a firm for which different processes have to be carried to achieve its objectives of profit maximization (assuming that all the organizations work with the view to maximize profits). If firms from different sectors are identified simultaneously, then the working of the economy as a whole could also be analyzed which in turn is useful in the decision-making proce...
15 Pages(3750 words)Assignment

Commercial Law: Micro-Maker and Lacey

...GUIDANCE FOR Read the scenario below and then answer each of the questions that follow. Your objective should be to demonstrate a sound understanding of the principles of contract/commercial law that apply to the situations that follow, AND, where appropriate, highlight the difference that adopting the standard form contract might make to the outcome of any dispute. Refer to the Sale of Goods Act 1979 (as amended) and the standard form contract that has been referred to throughout the module. Micro-Maker is a small company involved in the manufacture of microwave ovens. One of its main customers is a large department store called Lacey with many branches around the country. The business arrangements between buyer and seller have...
7 Pages(1750 words)Assignment

Economics in Business

...Economics in business Introduction: The purpose of this paper is to analyze the business objectives as best applicable to the Southampton Solent University. Herein, it is essential for the author to analyze the competitive landscape that the university finds itself and try and identify the forces which are governing the business decisions of the university. Further, the author aims to complete understand the simplex of competitive market forces and subsequently make recommendations for better future functionality of the university. PESTLE Analysis The author feels that it is applicable to use a PESTLE analysis due to the fact that the Political, Economic, Social, Technological, Legal and Environmental aspects of this model...
6 Pages(1500 words)Assignment

Economics of Business Strategy

.... The company also ensures that it does not abuse its dominant position in terms of controlling the market share(Rubenstein, 27). It does this by establishing a documented code of ethics that guide the behavior of its employees and its operations. As a company in the oil sector, the organization has an elaborate policy to guide itself against lawsuits emanating from environmental degradation. The ethical practice of the organization is to engage its operations in a manner that promotes the conservation of the environment, through reduction of carbonemissions (Clarke, 21). In meeting this objective, the company balances its economic goals and environmental concerns. The policy of the company is to comply with all laws that aim to protect...
8 Pages(2000 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Assignment on topic Micro Economics Assignment for FREE!

Contact Us