Questions from Microeconomics

Q: Suppose the long-run total cost function for an industry

Suppose the long-run total cost function for an industry is given by the cubic equation TC = a + bq + cq2 + dq3.Show (using calculus) that this total cost function is consistent with a U-shaped averag...

Q: Suppose you are given the following information about a particular industry

Suppose you are given the following information about a particular industry: Assume that all firms are identical, and that the market is characterized by pure competition. a.Find the equilibrium pric...

Q: Brenda wants to buy a new car and has a budget

Brenda wants to buy a new car and has a budget of $25,000.She has just found a magazine that assigns each car an index for styling and an index for gas mileage.Each index runs from 1-10, with 10 repre...

Q: A computer company produces hardware and software using the same plant

A computer company produces hardware and software using the same plant and labor. The total cost of producing computer processing units H and software programs S is given by TC = aH + bS !cHS where a,...

Q: Why do firms enter an industry when they know that in

Why do firms enter an industry when they know that in the long run economic profit will be zero?

Q: A city is considering how much to spend to hire people

A city is considering how much to spend to hire people to monitor its parking meters.The following information is available to the city manager: • Hiring each meter monitor costs $10,000 per year. •...

Q: Suppose that a competitive firm has a total cost function C

Suppose that a competitive firm has a total cost function C(q)= 450+15q+2q2 and a marginal cost function MC(q)=15+4q.If the market price is P = $115 per unit, find the level of output produced by the...

Q: Describe the equal marginal principle.Explain why this principle may

Describe the equal marginal principle.Explain why this principle may not hold if increasing marginal utility is associated with the consumption of one or both goods.

Q: Explain whether the following statements are true or false.

Explain whether the following statements are true or false. a.The marginal rate of substitution diminishes as an individual moves downward along the demand curve. b.The level of utility increases as...

Q: Julio receives utility from consuming food (F) and clothing

Julio receives utility from consuming food (F) and clothing (C) as given by the utility function U(C,F) = FC.In addition, the price of food is $2 per unit, the price of clothing is $10 per unit, and J...