ECONOMICS OBJ
1-10: ACDBADBDCC
11-20: CAABCCBCBA
21-30: DDABAACDBD
31-40: DBCCCDBACA
41-50: BBCBBCDBCA
PART-I
(1)
TABULATE
Output: 4, 9, 15, 20, 24, 27, 29, 30
TC: 45, 156, 264, 381, 481, 574, 679, 749
TR: 100, 190, 376, 522, 622, 691, 731, 748
MC: - , 22.2, A, 23.4, B=25, C, 52.5, 90
MR: - , D, E, 29.2, 25, 23, 20, F
(1ai)
MC = ∆TC/∆Q
MCA = TC15 - TC9/Q15 - Q9 = 264 - 156/15-9
= 108/6 = 18.0
MCB = TC24 - TC20/Q24 - Q20
= 481-381/24-20
= 100/4 = 25.0
MCc = TC27 - TC24/Q27 - Q24 = 574 - 481/27 - 24
= 93/3 = 31.0
(1aii)
MR = ∆TR/∆Q
MRD = TR9 - TR4/Q9 - Q4
= 190-100/9-4
= 90/5 = 18.0
MRE = TR15 - TR9/Q15 - Q9
= 376-190/15-9 = 186/6 = 31.0
MRF = TR30 - TR29/Q30 - Q29
= 748-731/30-29 = 17/1 = 17.0
(1bi)
The profit maximising output of the company is 24units
(1bii)
Reason in (1bi) above, MC=MR
(1c)
MC = MR at output 24
The profit maximising output = 25
(where MR=MC)
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(2ai)
In come elasticity between E and F
change in quantity demanded
= 150 -100 = 50
% change in quantity demanded= 50/100*100= 50%
Change in Income = 30,000 - 25,000 = 5000
% change in Income = 5000/25000 x 100 = 20%
Income elasticity of demand 50/20 =2.5
(2aii)
Income elasticity between G and H =
change in quantity demanded= 270-250 = 20
% change in quantity demanded = 20/250 * 100 = 8%
change in Income = 42,000 – 40,000 = 2000
change in Income
2000/40000 * 100 = 5%
Income elasticity of demand =8/5 =1.6
(2b)
Normal good and luxury good
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(6a)
The law states that If one input in the production of a commodity is increased while all other inputs are held fixed, a point will eventually be reached at which additions of the input yield progresively smallery, diminishing, increases in output.
(6b)
Marginal product focuses on the changes between production totals and the quantity of resources. Average product shows output a specific level of input. The peak of the average product curve is the point at which the marginal product cuirve and average product Curve intersect for the points below to the left of this point, the marginal product of the extra input higher than the average prochuct for example, if adding another worker increases output by more than the average product of the total labor force, then the marginal Is product of the new worker will raise the average product amount, that are average product Curve must be below the marginal product
Curve. Similarly, If the new workers add less product than the average
product amount, the average prodnet curve will he above the marginal produa Curve (for all points to the right of the point of the intersection of the two curves). At the point of intersection, the additional workert produces the same as the average product of the total work forces there will be no change. The Marginal product Come may fall to Zero, showing that an additional worker will have no limpact production, for example, if there is more space left the work in, to or if machines are working at 100% Capacity and all raw materials have been used up.
(6c)
(i)It is important because certain factors of production are Kept fixed. All factors of production, land, labour, capital for enterprise cannot be increased every time.
(ii)it is important because it is part of the basis for economists expectations
that a firm short-run marginal cost curves well slope upward as the number of units of output increase.
(iii)It is also an Important basis for the law of Supply's prediction that
the number of units of product that profit maximizing firm will wish
to sell increases as the price obtainable
for that product increases.
(iv)It is equally the concept that is employed constantly in micro economic theory and quite frequently in Macroeconomic theory as well.
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