Numericals & Revision - Aug 3
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Transcript of Numericals & Revision - Aug 3
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August 3, 2012Microeconomics
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2
Numericals
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Numerical
Arc Price elasticity of supply given that theprice decreases from Rs. 10 to Rs. 9 per
dozen is
Price / dozenQuantity (1000
dozens)
6 10
7 20
8 30
9 40
10 50
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Numerical
Supply function for a product is Qs =500P 1000. Calculate price elasticity
of supply at a price of Rs. 10
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Numerical
The cross price elasticity of demand betweenX and Y, given the schedule is
Before price change After price change
P Q P Q
Y 5 60 4 80
X 2 25 2 15
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Numerical
Calculate income elasticity of demand fromthe following schedule
P QConsumerIncome
4 150 5000
5 140 6000
4 125 4500
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Numerical
Calculate income elasticity of demand fromthe following schedule
P QConsumerIncome
4 150 5000
5 140 6000
4 125 4500
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Numerical
In a year, number of cars sold decreased by
20%, prices of cars increased by 5%, Per
Capita Income declined by 2% and price of
petrol increased by 10%, Income elasticity is
1.5 and cross-price elasticity of petrol and
cars is estimated to be -0.3
What is the impact of decline in per capitaincome on the demand of cars
Impact of increase in price of petrol on thedemand for cars
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Numerical
A farm product has the following demand
and supply functions
Q = 13500 500P
Q = 3000 + 200P
Calculate equilibrium price of the good
If the Government imposes a specific sales
tax of Rs. 10, the new equilibrium price
would be
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Numerical
The demand and supply functions are given
by:
Q = 400 + 15P
Q = 600 10P
If the Government fixes a price ceiling of Rs.12 for the product, what happens to the
demand or supply?
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Numerical
During rainy season the demand function of
umbrella is estimated to be P = 500 10Q.
The current market price is Rs. 100, the
consumer surplus is ??
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Numerical
Slope of the budget line (when good X is
taken on X-axis and good Y is taken on Y-
axis) is -0.25. If a consumer with an income
of Rs. 100 buys equal quantities of two
goods, X and Y, what would be the amount
spent on good X?
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Numerical
A consumer has an income of Rs. 19 for a
week. He would like to spend all the Rs. 19
on three goods X, Y and Z are Rs. 5, Rs. 3
and Re.1 per unit respectively. The MU
schedule is given below
Units Marginal Utilities
X Y Z
1 30 18 8
2 25 15 7
3 20 9 5
4 15 6 4
5 5 4 3
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Numerical
Production function for an agricultural
commodity is TP = 15L2 L3. How much
Labor should be employed to maximized
output?
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Numerical
A consumer is indifferent between the
combinations A and B. Calculate MRS
Combination Good X Good Y
A 10 14
B 12 13
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Numerical
Quantity demanded of a product decreases
from 4000 units to 3000 units when price of
the product increases from Rs. 40 to Rs. 45.
If income effect is estimated to be 900, the
substitution effect of the price change is?
l
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Numerical
Shoe and Co., manufactures shoes for export.
Their production function is:
TP = 15L2 L3
If highest AP has to be achieved, what is theamount of labor to be used?
What can be the AP when labor employed is
7.5?
What is the MP when AP is maximum?
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Thank you!