Microeconomics

August 3, 2012

Numericals

Numerical

Arc Price elasticity of supply given that the

price decreases from Rs. 10 to Rs. 9 per
dozen is
Price / dozen 6 7 8 9 10 Quantity (1000 dozens) 10 20 30 40 50

Numerical

Supply function for a product is Qs =

500P 1000. Calculate price elasticity of supply at a price of Rs. 10

Numerical

The cross price elasticity of demand between

X and Y, given the schedule is
Before price change After price change

60

80

25

15

Numerical

Calculate income elasticity of demand from

the following schedule
P Q Consumer Income

4 5
4

150 140
125

5000 6000
4500

Numerical

Calculate income elasticity of demand from

the following schedule
P Q Consumer Income

4 5
4

150 140
125

5000 6000
4500

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 capita

income on the demand of cars

Impact of increase in price of petrol on the

demand for cars

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

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?

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 ??

Numerical

Slope of the budget line (when good X is

taken on X-axis and good Y is taken on Yaxis) 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?

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 X Marginal Utilities Y Z

1
2 3 4 5

30
25 20 15 5

18
15 9 6 4

8
7 5 4 3

Numerical

Production function for an agricultural

commodity is TP = 15L2 L3. How much Labor should be employed to maximized output?

Numerical

A consumer is indifferent between the

combinations A and B. Calculate MRS

Combination A B

Good X 10 12

Good Y 14 13

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?

Numerical

Shoe and Co., manufactures shoes for export.

Their production function is:

TP = 15L2 L3 If highest AP has to be achieved, what is the

amount of labor to be used?

What can be the AP when labor employed is

7.5?

What is the MP when AP is maximum?

Thank you!