Econ 214 Final

# Econ 214 Final - Econ 214 Final Question 1 A The private...

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1Econ 214 Final Question 1: A) The private costs involve the decision making that affects the individual or group, however the social costs affect the individual and all others in society. B) A utility is whatever products individuals usually get the most of, or need. C) Demand only shows around how much people are willing to buy. However, quantity demanded shows specifically how much people are going to buy at a certain point.

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Question 2: The first way that microeconomics can be used in everyday life is to predict price changes. When one understands supply and demand they are more apt to know when prices will rise and decrease. Secondly, we can use microeconomics to look at the different market structures. Also we use microeconomics everyday to take advantage of competitive markets and price cuts. Another way is understanding government’s taxes on commodities. Therefore when the government plans to raise taxes we can be sure it will affect the things we buy everyday due to elasticity.
Question 3: A) This is an imperfect competitor. Just by reading the question we see that there was research to acquire the information. Which simply means that it cannot be a perfect competitor in which everyone would have the knowledge without cost. B) MR=MC 34,875.5 - 29.8Q = 495 + 4.2Q -29.8Q - 4.2Q = 495 - 34,875.5 -34Q = -34,380.5 Q = 1011.19 Maximizing quantity is 1,011.19 car parts. P = 34,875.5 - 14.9(1011.19) P = 34,875.5 - 15066.73 P = 19,808.77 The profit maximizing price is \$19,808.77 for the car parts. C) No, the quantity demanded does not equal the quantity supplied because the demand for the car parts is higher than the supply. D) TC = 495Q + 1.7Q 2 + 6,626,309 TC = 495(1011.19) + 1.7(1011.19) 2 + 6,626,309 TC = 500,539.05 + 601,473.66 + 6,626,309 TC = 7,728,321.71 ATC = TC/Q ATC = 7,728,321.71/1011.19 ATC = 7642.8 Average Total Cost: \$7,642.80 AVC = VC/Q AVC = 495/1011.19 AVC = 0.49

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Average Variable Cost: \$0.49 AFC = FC/Q AFC = 6,626,309/1011.19 AFC = 6552.98 Average Fixed Cost: \$6,552.98 E) TC = 7,728,321.71 MR = 34,875.5 - 29.8(1011.19) MR = 4,742.04
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## This note was uploaded on 04/07/2008 for the course ECON 214 taught by Professor Marks during the Spring '07 term at Rhode Island College.

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Econ 214 Final - Econ 214 Final Question 1 A The private...

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