ECON2103 - Suggested Solutions to Problem Set (3)
Chapter 4
Questions for Review
Question 1
A competitive market is a market in which there are many buyers and many sellers of an identical
product so that each has a negligible impact on the market price.
ECON2103 Suggested Solutions to Problem Set (7)
Chapter 13
Problems and Applications
Question 2
(a) opportunity cost
(b) average cost
(c) fixed cost
(d)
(e)
(f)
variable cost
total cost
marginal cost
Question 3
Here is the table of costs:
Workers
(d)
(e)
ECON2103 - Suggested Solutions to Problem Set (1)
Chapter 1
Questions for Review
Question 3
The marginal benefit of a glass of water depends on your circumstances. If you have just run a marathon
or you have been walking in the desert sun for three hours,
ECON2103 - Suggested Solutions to Problem Set (2)
Chapter 3
Questions for Review
Question 1
PPF will be linear if the opportunity cost of producing a good is constant no matter how much of that
good is produced. (Inputs are not specialized)
Question 8
Eco
ECON2103 - Suggested Solutions to Problem Set (4)
Chapter 5
Problems and Applications
Question 5
Billy could be right. If demand increases, but supply is perfectly inelastic, equilibrium price will rise but
the equilibrium quantity will remain the same.
V
ECON2103 - Suggested Solutions to Problem Set (6)
Chapter 6
Problems and Applications
Question 5
Reducing the payroll tax paid by firms and using part of the extra revenue to reduce the payroll tax paid
by workers would not make workers better off, becaus
ECON2103 Suggested Solutions to Problem Set (9)
Chapter 17
Problems and Applications
Question 2
(a) If there were many suppliers of diamonds, P = MC, so the quantity would be 12,000.
(b) With only one supplier of diamonds, quantity would be set where MC =
ECON2103 Suggested Solutions to Problem Set (10)
Chapter 10
Problems and Applications
Question 1
The Club conveys a negative externality on other car owners because car thieves will not attempt to steal
a car with The Club visibly in place. This means tha
ECON2103 Suggested Solutions to Problem Set (8)
Chapter 15
Problems and Applications
Question 2
The following table shows revenue, costs, and profits, where quantities are in thousands, and total
revenue, total cost, and profit are in millions of dollars: