MicroEconomics Homework - Essay Example

Comments (0) Cite this document
Summary
1) According to the economic theory, consumer surplus is the difference between the price you are willing to pay for a commodity and the actual price for a product. For example, if you want to buy a computer, there must be some value that you will be prepared to pay, for…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.7% of users find it useful
MicroEconomics Homework
Read TextPreview

Extract of sample "MicroEconomics Homework"

Download file to see previous pages For example, a product with really high elasticity will mean that you don’t value a product very much and hence it will have a low consumer surplus and vice versa.
2) Elasticity, simply, is the responsiveness of quantity demanded to a change in price. For example, when you levy a sales tax on any product its price increases. This price increase is going to decrease the quantity demanded of this product. The magnitude of change, however, will depend upon the elasticity of demand. For example, if sales-tax is levied on a product with inelastic demand, then quantity is not going to fall by a large amount and large revenue will be collected. On the other hand, if sales-tax is levied on a product with elastic demand, the change in price is going to decrease the quantity by a greater amount and revenue collected will be less.
3) I think that the government should charge those products with high price inelasticity of supply. This is because, if it levies taxes on products with high elasticity of supply, the suppliers would pressurize the government by supplying fewer amounts in the market and hence majority of consumers will be deprived of the product. So, it should charge a product with low price elasticity of demand so that supply does not change much and consumers get the adequate amount of product.
4) Simply, the perfectly inelastic demand and supply would ensure that imposition of tax is going to reduce the quantity in the market by smaller amounts and hence, this will result in little or no welfare loss.
5) In this case, consumer will bear a bigger burden of the tax because suppliers will easily pass it on consumer by supplying less, but consumers would encourage them to keep producing the same amount of cigarettes by paying a bigger share of tax.
7) In this case when price is more inelastic for suppliers and less inelastic for consumer, then the suppliers of a product ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“MicroEconomics Homework Essay Example | Topics and Well Written Essays - 1500 words”, n.d.)
MicroEconomics Homework Essay Example | Topics and Well Written Essays - 1500 words. Retrieved from https://studentshare.org/miscellaneous/1558491-microeconomics-homework
(MicroEconomics Homework Essay Example | Topics and Well Written Essays - 1500 Words)
MicroEconomics Homework Essay Example | Topics and Well Written Essays - 1500 Words. https://studentshare.org/miscellaneous/1558491-microeconomics-homework.
“MicroEconomics Homework Essay Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.org/miscellaneous/1558491-microeconomics-homework.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF MicroEconomics Homework

Microeconomics

... Point “a” does not represent an efficient allocation of factor of production. To see this, consider a point like ‘b’ in the same graph shown below. It provides the same level of output of good X as point “a” since we still are on the same X isoquant, but the production of Y has increased since now we are on a higher Y isoquant. Similarly, we could have picked a point on the Y isoquant through point “a” which is tangent to a higher X isoquant. This would imply a higher production of good X without reducing the output of good Y. Since such Pareto improvements are possible, point “a” can’t be an efficient allocation. 2) The Coase theorem states that in the absence of transaction costs, ownership of property rights does not matter... Point “a”...
3 Pages(750 words)Essay

Microeconomics

...? Microeconomics 08/26 Microeconomics In 2007, the potato chip industry in the Northwest was competitively structured and in long-run competitive equilibrium; firms were earning a normal rate of return and were competing in a monopolistically competitive market structure. In 2008, two smart lawyers quietly bought up all the firms and began operations as a monopoly called “Wonks.” To operate efficiently, Wonks hired a management consulting firm, which estimated a different long-run competitive equilibrium. The new company is now a “monopoly” which is only the sole provider of potato chip in the entire country. Now, there is only a single supplier of potato chip all across the region (Brigham, 1976). As all...
6 Pages(1500 words)Essay

Microeconomics

...of the of the Term Paper on Microeconomics Introduction As economics has many fields or branches, microeconomics is one of such fields, which deals with the study of consumer behavior. The consumer can belong to a household, an industry or a company. Hence, microeconomics relates to the study of allocation of funds by different sections of users, which include domestic households, firms and industries. Their decision making pattern is thoroughly studied to make assessment and observation for the future forecast of market condition, particularly when resources are limited. However, since the buying and selling is common to all participants of economy, therefore...
10 Pages(2500 words)Term Paper

Microeconomics

...Indian Railways Enjoying 150 years of Monopoly Introduction to Monopoly Monopoly is a market conditions where there is only one seller to meet the requirements of large number of buyers. In other words, monopoly exists where there is no competition. The buyers have no alternatives to select and purchase in a monopoly market. The single seller determines the price of his product, the supply at any point of time, and indeed, the quality of the product. At the first glance, this seems to be unrealistic; there are some items in the real market which enjoys all the privileges of monopoly. Bill Gates, the owner of Microsoft Corporation had once experienced it. The worst thing about monopoly is that the seller gets market command... Railways...
4 Pages(1000 words)Essay

Microeconomics

...Topic:  MACROECONOMICS Table of Contents 2 Introduction 3 Body 4 This report aims at demystifying two definite aspects of the Keynesian macroeconomic model. It is a static demand side model that came into existence after the Great Depression of 1929. Firstly, the national income account identity, to be precise the saving-investment identity in a Keynesian economy is discussed. Accounting identities always exhibit equality regardless the magnitude or value of its variables. Or in other words accounting identities are statements that by definition are always true. In a closed or Keynesian economy the savings-investment identity is derived without taking into consideration export and import. The saving-investment is derived twice... MACROECONOMIC...
7 Pages(1750 words)Term Paper

Microeconomics Homework

...Q1) e) 13, one person’s spending is another’s income f) tradeoff g) equity h) opportunity cost i) j) Specialization k) l) point 15 Q3) the opportunity cost of buying the book online is the time that the student will forgo to get the book. b) Relevant choices: 1) He buys the book from the college bookstore for $65. 2) He orders the book online for $55 and use the option of standard shipping to get the book delivered. His total cost will be $58.99 but he will have to wait for 3-7 days. 3) He orders the book online for $55 and use the option of second-day air to get the book delivered. His total cost will be $63.98 but he will have to wait for 2 business days to get the book. The choice of option depends on the money the student... e) 13, one...
3 Pages(750 words)Essay

Microeconomics

...Micro & Macroeconomics Even though Microeconomics and Macroeconomics may appear to be the same thing, there are distinct differences between the two. The one thing that these two concepts have in common with each other is that they both come from the main category of economics (“Difference”). The prefixes of these two functions give an indication of their origin—micro is smaller while macro is larger. This is just a simple explanation of these two economic principles because, in reality, it is a lot more complicated than that. Microeconomics is to do with the market’s supply and demand factors that establish the price levels of an economy (“Difference”). Macroeconomics is similar to this except that it...
2 Pages(500 words)Essay

Microeconomics

...Microeconomics Microeconomics Resources in a country can be ified into two groups; tangible and intangible resources. Goods such as food and drinks, electronic goods, vehicles etc are tangible resources whereas services like education, healthcare, tourism, business consultancy etc are intangible resources. UAE is a country which is blessed with immense oil resources whereas it lacks scarcity in manpower resources. In fact UAE is currently facing demographic imbalances because of the huge expatriate workforce available there. The number of overseas population is more than the number of locals in UAE. Abdullah (2007) has pointed out that “8 out of 10 people living in the UAE were born abroad as per the...
6 Pages(1500 words)Research Paper

Microeconomics

... Discuss how a firm in a perfectly competitive market can make a loss in the short run yet remain in the market. What happens to the firm in the long run? Introduction A huge number of producers with the same standardized products characterize competitive business markets. A competitive market does not give the producers or sellers the ability to influence the price. Entries and exit of sellers into the market provide unnecessary no price actions (Bartlett 12). In such a business environment, a firm can perfectly make a loss in the short run as all its competitors provide the same products. The probability of every firm in the same industry to experience a loss depends on the availability of the same product (Ferrell... Discuss how a firm...
3 Pages(750 words)Essay

Microeconomics

...Consultation on Market Structures Consultation on Market Structures Market structures are the different conditions or characteristics of a certain market that interrelate to determine the degree of competition and profitability of a given market in an economy. There are different market structures in the economy determined by the different characteristics including monopoly, perfect competition, oligopoly, and monopolistic competition. Perfect competition is a market structure where there are many buyers and sellers operating in the market having no influence on the price, hence are price takers (Samuelson & Stephen, 2012). One of the main characteristics of perfect competition includes sale of homogenous goods where all firms... on Market...
8 Pages(2000 words)Essay
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 Essay on topic MicroEconomics Homework for FREE!

Contact Us