numericals & revision - aug 3

7/31/2019 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


5/18

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


9/18

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?


15/18

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!

numericals & revision - aug 3

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