Africa Nazarene UniversityMBA 811: Managerial EconomicsDistance Learning 1st Assignment: 2012 August...

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Africa Nazarene UniversityMBA 811: Managerial EconomicsDistance Learning 1st Assignment: 2012 August TrimesterDue date: 12th October 2012Instructions: Attempt all the questions. Use graphs where necessary.1 (a) The demand function of a certain product sold by a firm is given as: Qd = 40 – 2P . The total cost function for the firm is TC = 2Q2 – Q XXXXXXXXXXDetermine the profit maximizing output for the firm.b) A farmer seeks to maximize the output of 2 products; wheat ( X ) and barley ( Y ). The production function that relates the 2 products is given as 80X - 2X2 - XY - 3Y2 + 100Y . It takes time before the 2 products can be put to the market. Given that the farmer’sstorage capacity is 1200 tonnes, determine how much of each product he should produce.   2  	Michael’s utility function is given as  U = 30Q11/2Q21/2  The price a unit of Q1 and Q2 is 20 and 15 respectively. Michael is on a tight budget and can only spend USD 450. Determine the number of units of each commodity that Michael can buy so as to maximize his utility.(b) The demand and supply functions of a certain product are given as follows: Demand function: Qd = 240 – 2PSupply function: QS = -40 + 3PIf the government was to impose a USD 5 tax on the commodity, determine:(i) the equilibrium price and quantity before and after tax(ii) How the tax is shared between the consumers and the producers(iii) Comment on the nature of the commodity in reference to your answer in (ii)above.4. The table below represents hypothetical figures for total utility derivedfrom consumption of three goods, A, B and C by a student. The prices per unit of A, Band C are USD. 5, 3 and 2 respectively. 	 		 			No. of unitsConsumed 			Total UtilityTUA 			Total UtilityTUB 			Total UtilityTUC 		 		 			2 			144 			120 			128 		 		 			4 			240 			208 			240 		 		 			6 			320 			272 			320 		 		 			8 			382 			320 			376 		 		 			10 			456 			360 			408 		 		 			12 			496 			376 			432 		 		 			14 			520 			384 			448 		 	  a. Determine the marginal utilities for each goodb. Find the optimal quantities of each good for consumptionc. Find the total expenditure at the optimal level of consumption

Robert · Accepted Answer

Africa Nazarene University
MBA 811: Managerial Economics
Distance Learning 1st Assignment: 2012 August Trimester
Due date: 12th October 2012
Instructions: Attempt all the questions. Use graphs where necessary.
1 (a) The demand function of a certain product sold by a firm is given as: Qd = 40 – 2P
. The total cost function for the firm is TC = 2Q2 – Q + 20 . Determine the profit maximizing output for the firm. 
Equate Mr with MC
MC= dTC/ dQ = 4Q-1
P= (40-Q)/2
TR= Q( 40-Q)/2
MR= 20-Q
20-Q= 4Q-1
21=5Q
Q=21/5 =4.2
b) A farmer seeks to maximize the output of 2 products; wheat ( X ) and barley ( Y ). The production function that relates the 2 products is given as 80X - 2X2 - XY - 3Y2 + 100Y
. It takes time before the 2 products can be put to the market. Given that the farmer’s
storage capacity is 1200 tonnes, determine how much of each product he should produce.
THIS IS INCOMPLETE.

Africa Nazarene University MBA 811: Managerial Economics Distance Learning 1 s t A ssignment: 2012 August Trimester Due date: 12 t h O ctober 2012 In structions: Attempt all the questions. Use graphs...

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No. of units Consumed	Total Utility TUA	Total Utility TUB	Total Utility TUC
2	144	120	128
4	240	208	240
6	320	272	320
8	382	320	376
10	456	360	408
12	496	376	432
14	520	384	448