Essay on Microeconomics Quiz Review

Imagine that you have decided to open a small ice cream stand on campus called "Ice-Campusades." You are very excited because you love ice cream (delicious!) and this is a fun way for you to apply your business and economics skills! Here is the first month's scenario--you order the same number (and the same variety) of ice creams each day from the ice cream suppliers, and your ice creams are always marked at $1.50 each. However, you notice that there are days when ice creams remain unsold but other days when there are not enough ice creams for the number of customers.

I have read and understand the Rules Relating to Awards (Rule 3 Section 18 – Academic Misconduct Including Plagiarism) as contained in the SCU Policy Library. I understand the penalties that apply for plagiarism and agree to be bound by these rules. The work I am submitting electronically is entirely my own work.

Using the data and your own economic knowledge, assess the case for financing universities mainly through charging fees to their students.

15. In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is ( )

The point of profit maximization for the firm in the given scenario occurs at a quantity of 8 units. At this point they have maximized their profit and as you can see to go beyond this point would cause the firm to incur economic losses.

Basic economic models assume that all parties have “perfect information.” How does “informational asymmetry” undermine our market economy?

(b) How many units will Yabba have to sell next year in order for it to achieve the same profit that it did this year?

SABMiller and Diageo are two largest beer producer in Africa. ”SABMiller, if combined with its partnership with France's Castel Group, sells roughly 60% Africa’s beer by volume. Diageo’s also expands its operation successfully that Senator Keg, its supercheap beer, is also now number two most popular beers in Kenya. As these giant brewers monopolized Africa’s beer market, it can be said that the market has an oligopoly market structure, and both pursue identic operations, so the market can be labeled as competitive. The interdependence that is happening between both brewers makes the competition happens. As SABMiller produces Impala that is half price from its previous beer Manica, Diageo produces Senator Keg to balance it. Diageo

2. If the department that produces Item 345 was a profit center and if you were the manager of that department, would it be to your financial advantage to lower the price?

8. Compared to a perfectly competitive industry with the same demand and cost curves, a monopoly’s price and output will be which of the following?

To maximize profits, Subway at Singing River Hospital main focus is to establish individual prices in which marginal cost equal marginal revenue (McConnell, Brue & Flynn, 2009). It is clear that customers will pay more for sandwiches with more meat rather than a sandwich will less meat in it. In the sandwich business, sandwiches with single meats are priced at five dollars each. On the other hand we will raise the price of single meat sandwiches to see if it can hold the demand. For the simple fact, as sales increase we must account for labor cost, discounts, and other variable cost. For example, if 20 sandwiches are sold we will profit a hundred dollars, 40 sandwiches, profit would be 200 dollars, 60 sandwiches, profit will be 300 dollars, and for 80 sandwiches sold the profit will be 400 dollars. The marginal profit determine as each incremental increase in sales. Marginal profit is defined as the change for each sandwich sold (McConnell, Brue & Flynn, 2009). Following the example above we have determined a unit is an increment of 20 sandwiches. To increase sales from zero to 20 sandwiches the marginal profit is 100 dollars. To increase sells from 20 to 40 sandwiches, marginal profit would consist of 50 dollars. Raising sales from 40 to 60 sandwiches the marginal profit

b) all combinations of inputs in which the firm has the same level of total cost.

Chapter 8 Sample Multiple Choice Questions 1. In a competitive market, no single producer can influence the market price because a. many other sellers are offering a product that is essentially identical. b. consumers have more influence over the market price than producers do. c. government intervention prevents firms from influencing price. d. producers agree not to change the price. Suppose a firm in a competitive market received $1,000 in total revenue and had a marginal revenue of $10 for the last unit produced and sold. What is the average revenue per unit, and how many units were sold? a. $5 and 50 b. $5 and 100 c. $10 and 50 d. $10 and 100 When a profit-maximizing firm in a competitive market has zero economic profit, accounting

Perfect Competition is a theory of market structure based on four assumptions: there are many sellers and buyers, sellers sell a homogeneous good, buyers and sellers have all relevant information, entry into or exit from the market is easy (Arnold.214).This market structure is relatively easy to enter and exit which is convenient for anyone who wants to own a company. A perfectively competitive firm is a price taker, which is a seller that cannot control the prices of the product they sell. “There is no government interference in the market in the form of taxes, subsidies, rationing of essential goods etc.”(Dutta.63) Consumers have many substitutes if the products they want to buy become too expensive or its quality is poor. For markets to have incentives for substitute for the products will be easy because consumers will be willing to buy as long as the rules apply. (Berta, Julien, tripcou. 2012) It

Explain and illustrate with diagrams the differences between diminishing marginal returns and decreasing economies of scale and cite causes and examples.