Micro Concepts Homework Each letter = 2 points Graphics are done to scale Due in class 9/15/14 1.
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Transcript of Micro Concepts Homework Each letter = 2 points Graphics are done to scale Due in class 9/15/14 1.
![Page 1: Micro Concepts Homework Each letter = 2 points Graphics are done to scale Due in class 9/15/14 1.](https://reader035.fdocuments.in/reader035/viewer/2022072005/56649f3e5503460f94c5ed75/html5/thumbnails/1.jpg)
Micro Concepts Homework
Each letter = 2 points
Graphics are done to scale
Due in class 9/15/14
1
![Page 2: Micro Concepts Homework Each letter = 2 points Graphics are done to scale Due in class 9/15/14 1.](https://reader035.fdocuments.in/reader035/viewer/2022072005/56649f3e5503460f94c5ed75/html5/thumbnails/2.jpg)
1. Consumer Demand
a. Suppose that income is $100, fish costs $4/kilo, and rice costs $1/kilo.
b. Draw the budget constraint.
c. Draw additional indifference curves to show the initial equilibrium
100 200
100
200
Fish
Rice2
![Page 3: Micro Concepts Homework Each letter = 2 points Graphics are done to scale Due in class 9/15/14 1.](https://reader035.fdocuments.in/reader035/viewer/2022072005/56649f3e5503460f94c5ed75/html5/thumbnails/3.jpg)
2. Consumer Demand
a. Using the Slide 2, suppose the price of fish falls to $0.50/kilo.
b. Show the new equilibrium.
c. Does utility increase or decrease? Why?
100 200
100
200
Fish
Rice3
![Page 4: Micro Concepts Homework Each letter = 2 points Graphics are done to scale Due in class 9/15/14 1.](https://reader035.fdocuments.in/reader035/viewer/2022072005/56649f3e5503460f94c5ed75/html5/thumbnails/4.jpg)
3. Consumer Demand
a. Using the Slide 2 parameters, suppose income doubles.
b. Show the new equilibrium.
c. Does utility increase or decrease? Why?
100 200
100
200
Fish
Rice4
![Page 5: Micro Concepts Homework Each letter = 2 points Graphics are done to scale Due in class 9/15/14 1.](https://reader035.fdocuments.in/reader035/viewer/2022072005/56649f3e5503460f94c5ed75/html5/thumbnails/5.jpg)
4. Production
a. Suppose a lab wishes to process 100 X-Rays per day. Machines rent for $200 per day, workers are paid $150 per day.
b. Show an expenditure line for $1800 per day.
c. Calculate the least cost combination of machines and labor to produce 100 X-rays.
d. Indicate X*, T*, and E*.
8 16
Technicians
8
16
X-Ray machines
Q=100Q=150 Q=200
5
![Page 6: Micro Concepts Homework Each letter = 2 points Graphics are done to scale Due in class 9/15/14 1.](https://reader035.fdocuments.in/reader035/viewer/2022072005/56649f3e5503460f94c5ed75/html5/thumbnails/6.jpg)
5. Production
a. Starting with Slide 5, suppose that technicians negotiate a pay raise to $200 per day.
b. Calculate the least cost combination of machines and labor to produce 100 X-rays per day.
c. Indicate X*, T*, and E*.
8 16
Technicians
8
16
X-Ray machines
Q=100Q=150 Q=200
6
![Page 7: Micro Concepts Homework Each letter = 2 points Graphics are done to scale Due in class 9/15/14 1.](https://reader035.fdocuments.in/reader035/viewer/2022072005/56649f3e5503460f94c5ed75/html5/thumbnails/7.jpg)
6. Production
8 16
Technicians
8
16
X-Ray machines
Q=100Q=150 Q=200
a. Starting with Slide 5, suppose that technicians negotiate a pay raise to $200 per day.
b. Calculate the least cost combination of machines and labor to produce 150 X-rays per day.
c. Indicate X*, T*, and E*.
7