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1. Explain the definition and assumptions of law of demand. Discuss also the exceptional cases paradoxical to the law of demand

1. Explain the definition and assumptions of law of demand. Discuss also the exceptional cases paradoxical to the law of demand

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. Explain the definition and assumptions of law of demand. Discuss also the exceptional cases paradoxical to the law of demand 2. Many owners of small businesses do not pay themselves a salary. What effect will this practice have on the calculation of the firm's accounting profit? Economic profit? Explain. 3. Define the concept of scarcity. Explain the significance of this concept in relation to the concept of opportunity cost. What are your opportunity costs of attending Evening class at Ambo University Woliso Campus? 4. Explain the major determinants of demand and supply theorotically.Support your explanation by graph. 5. Suppose that the unit price of a commodity of firm X is defined by: P = 90 – Q and the total cost of producing this commodity is defined by the cost function: TC = 100 + 0.5Q², compute i. Total Revenue (TR) ii. Marginal Revenue(MR) and interpret the result iii. Marginal cost (MC) and interprets the result iv. Find the level of output and price which maximize profit. v. Find the maximum profit vi. Check the second order condition
Transcribed Image Text:1. Explain the definition and assumptions of law of demand. Discuss also the exceptional cases paradoxical to the law of demand 2. Many owners of small businesses do not pay themselves a salary. What effect will this practice have on the calculation of the firm's accounting profit? Economic profit? Explain. 3. Define the concept of scarcity. Explain the significance of this concept in relation to the concept of opportunity cost. What are your opportunity costs of attending Evening class at Ambo University Woliso Campus? 4. Explain the major determinants of demand and supply theorotically.Support your explanation by graph. 5. Suppose that the unit price of a commodity of firm X is defined by: P = 90 – Q and the total cost of producing this commodity is defined by the cost function: TC = 100 + 0.5Q², compute i. Total Revenue (TR) ii. Marginal Revenue(MR) and interpret the result iii. Marginal cost (MC) and interprets the result iv. Find the level of output and price which maximize profit. v. Find the maximum profit vi. Check the second order condition
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