IA 710 CLASS 1 Scarcity‚ shortage and substitutability 1. Answer all parts: a) What do you think is meant by the concept of constrained choice? Why is economics often described as the science of constrained choice? b) Explain how scarcity‚ choice and opportunity cost are relevant when choosing amongst alternatives? 2. Define the concept of “opportunity cost” and discuss various examples. 3. Explain how the concept of opportunity cost may be used to explain the following:
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Oligopoly From Wikipedia‚ the free encyclopedia An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). Oligopolies can result from various forms of collusion which reduce competition and lead to higher costs for consumers. [1] With few sellers‚ each oligopolist is likely to be aware of the actions of the others. The decisions of one firm therefore influence and are influenced by the decisions of other firms. Strategic planning by oligopolists
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Law of Equi Marginal Utility According to this‚ a consumer is in equilibrium when he distributes his given money income among various goods in such a way that marginal utility derived from the last rupee spent on each good is the same. Assumptions The main assumptions of the law of equi-marginal utility are as under: (1) Independent utilities. The marginal utilities of different commodities are independent of each other and diminishes with more and more purchases. (2) Constant marginal
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C. total revenue exceeds total cost by the largest amount. D. total revenue equals total cost. E. both b and c 2. The function a decision maker seeks to maximize or minimize is the ________ function. A. optimal B. decision-making C. objective D. marginal E. none of the above 3. Choice variables A. determine the value of the objective function B. determine the constraint C. can only take on integer values D. cannot be continuous E. both c and d 4. For an unconstrained maximization problem A. the decision
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a larger level of output than the minimum average total cost d. at the same level of output as the average fixed costs e. same as minimum marginal cost 2. The multiplant monopolist maximises profits when a. Marginal cost equals marginal revenue b. When marginal cost in each plant are equal c. When average cost in each plant is equal d. When marginal revenue in each plant is zero e. When he produces only in the low cost plant 3. If the market price is exactly equal to average cost‚
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IKT434 Topics in Economics Managerial Economics Practical Applications of Marginal Analysis The most common use of marginal analysis is to find the profit maximizing activity level. To show how this is done‚ consider the following case of Storrs Manufacturing Company. Case Study: Storrs manufacturing company Storrs manufacturing company is located in Ankara. The company has developed and test-marketed the “Golden-Bear Golf Cart”‚ a newly and highly energy efficient golf cart. The product is
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Level (per hour) (boxes per hour) 0 0 1 20 2 46 3 66 4 80 5 85 Marginal Production Level Complete the table and determine the most efficient number of movers to hire. Explain. (Be sure to discuss average production and marginal production levels.) Does the production function in the table exhibit diminishing marginal returns? Explain what you think is happening. Solution: Number of Workers Total Product of Labor Average (per hour)
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Economics 5315 Fall 1999 Managerial Economics Professor Henderson Final Exam 1. The Zinger Company manufactures and sells a line of sewing machines. Monthly demand for one its most popular models is given by the following relationship: Q = 400 – 0.5P where P is price and Q is quantity demanded. Total costs of production (including a “normal” return on owners’ investment) per month are: C = 20‚000 + 50Q + 3Q2 a. Express total profits (() in
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Pellucid Marginal Degeneration is a rare corneal ectatic disorder(PMC). This bilateral‚ non-hereditary ‚ idiopathic disorder is characterized by irregular astigmatism(Collagen cross-linking in the treatment of pellucid marginal degeneration)and thinning of the peripheral cornea in absence of inflammation‚ often affecting the inferior quadrant in a crescentic fashion. The disorder includes an area of corneal protrusion above the point of maximal thinning. This is the hallmark of the disorder and is
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MARGINAL COSTING AS A COSTING SYSTEM Marginal Costing is a type of flexible standard costing that separates fixed costs from proportional costs in relation to the output quantity of the objects. In particular‚ Marginal Costing is a comprehensive and sophisticated method of planning and monitoring costs based on resource drivers. Selecting the resource drivers and separating the costs into fixed and proportional components ensures that cost fluctuations caused by changes in operating levels‚ as
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