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Assignment of the Course Introduction to Economics

This document is an assignment for freshman students introducing key concepts in economics, including opportunity cost, production possibility frontier, demand and supply dynamics, utility theories, and market structures. It includes various questions and problems that require calculations and explanations related to these concepts. The assignment aims to enhance students' understanding of economic principles through real-life applications and graphical representations.

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Yacko LEGEND
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8 views3 pages

Assignment of the Course Introduction to Economics

This document is an assignment for freshman students introducing key concepts in economics, including opportunity cost, production possibility frontier, demand and supply dynamics, utility theories, and market structures. It includes various questions and problems that require calculations and explanations related to these concepts. The assignment aims to enhance students' understanding of economic principles through real-life applications and graphical representations.

Uploaded by

Yacko LEGEND
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Introduction to Economics

Assignment For freshman students

1. Define opportunity cost, provide a real-life example from your daily life and explain how
it relates to the concept of scarcity.
2. Describe the Production Possibility Frontier (PPF) and explain what happens when the
PPF shifts outward.
3. Explain how substitutes and complements affect the demand for a product.
4. Distinguish between a movement along the demand curve and a shift in the demand curve.
Provide an example of each.
5. What is the difference between cardinal utility and ordinal utility? Which theory is more
realistic?
6. Explain the law of diminishing marginal returns. Provide a real-life example.
7. Discuss the relationship between short-run production and cost curves. And show
graphically.
8. List and explain the key characteristics of a perfectly competitive market.
9. What are the key characteristics of a monopoly? How does it differ from perfect
competition?
10. Using the production possibility table below, calculate the opportunity cost of moving
from combination B to C.

Combination Good X Good Y


A 0 100
B 2 90
C 4 60

11. If the price of a product increases from $10 to $15, and the quantity demanded decreases
from 50 units to 30 units, calculate the price elasticity of demand and determine the type
of goods.
12. The supply function for the given market is Qs=10+3P and the demand function is
Qd=40−2P, calculate the equilibrium price and quantity. Show your result graphically.
13. If a consumer has a utility function U = X^2Y, where X and Y are quantities of two
goods, calculate the marginal utility of X when X = 3 and Y = 4.
14. The cost function is TC = 50 + 10Q + 2Q^2. Determine the marginal cost when Q= 5.
15. A firm's total product is as follows: Calculate the marginal product of the 3rd labor unit

Labor Units Total Product


1 10
2 25
3 35
4 40

16. A monopoly firm faces the demand curve P = 50 - Q and has a total cost function of
TC = 20 + 10Q. Find the profit-maximizing level of quantity and price. Show your result
graphically.
17. A firm in perfect competition has a cost function TC = 100 + 5Q^2. If the market price is
$40, calculate the profit-maximizing output.
18. Assume the elasticity of supply is Es = 0.8. If the price increases from $50 to $60, and
the initial quantity supplied is 200 units, calculate the new quantity supplied.
19. A firm's cost structure includes fixed costs of $200 and variable costs of $5 per unit. If
the firm produces 50 units, calculate the total cost, average cost, and average variable cost.
20. A consumer's utility function is U = X^{0.5}Y^{0.5}. If the consumer has an income of
$100 and the prices of goods X and Y are $5 and $10 respectively,
A. Calculate the optimal quantities of X and Y that maximize utility.
B. Calculate Marginal rate of substitution.
C. What is the total utility on this Equilibrium?
21. Given the utility function U = X^{0.3}Y^{0.7}, and assuming the consumer has an
income of $200, while PX = 4 and PY = 8,
A. Calculate the optimal quantities of X and Y that maximize utility.
B. Calculate Marginal rate of substitution.
C. What is the total utility on this Equilibrium?
22. A firm’s production function is Q = 5L^ {0.5}K^ {0.5}, where L and K represent units
of labor and capital. Then
A. Calculate the optimal quantities of L and K that maximize Output.
B. Calculate Marginal rate of Technical substitution.
C. What is the total product on this Equilibrium?
23. A monopolist faces the demand curve P = 50 - Q and has a total cost function
TC = 20 +5Q+ 10Q^2. Calculate the profit-maximizing price, quantity, and profit.
24. The demand function for product X is Qx=80−2Px+3Py+0.5I+0.2N

Given the following,

 Px =10
 Py=20
 I=50 (consumer income)
 N=1000 (population number)
A. Calculate the cross-price elasticity of demand for X and interpret your result.
B. Calculate the income elasticity of demand for X and interpret the result.

25. A firm observes that when the price of a substitute good rises from $20 to $25, the
demand for its product increases from 500 to 600 units. Calculate the cross-price elasticity
of demand and interpret the result.

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