Microeconomics Problem Solving Questions

Posted: January 20th, 2023

Problem 1
 
Bill can produce either tables or chairs. Bill can work up to 10 hours a day. His production possibilities are given in the table below:
 

Tables
Chairs

0
100

10
80

20
60

30
40

40
20

50
0

Construct the production possibilities frontier (PPF) for Bill. Put tables on the Horizontal axis and chairs on the vertical axis.
What is Bill’s opportunity cost of producing one additional table?
What is Bill’s opportunity cost of producing one additional chair?
Currently Bill is producing 20 tables and 40 chairs.

Is this allocation of resources efficient? Why?
Show this allocation on the graph and advise Bill how he can be more efficient.

 
Problem 2
 
Suppose the market for corn is given by the following equations for supply and demand:
QS = 2p − 2
QD = 13 − p
where Q is the quantity in millions of bushels per year and p is the price.

Calculate the equilibrium price and quantity.
Sketch the supply and demand curves on a graph indicating the equilibrium quantity and price.
Calculate the price-elasticity of demand and supply at the equilibrium price/quantity.

The government judges the market price is under expectations and announces a price floor equal to $7 per bushel.

Would there be a surplus or a shortage?
What would be the quantity of excess supply or demand that results?
Use the graph to show you results.

Rubric for Research Paper

 
 
Outstanding – 20pts
Good  – 15pts
Fair – 10pts
Unacceptable – 5pts

 
Outline
 
Excellent section headings, indicative of a steady “flow” to the overall paper. Topics and subtopics clearly indicated.
Professional looking.
Good section headings, indicative to a steady “flow” to the overall paper. Topics clearly indicated, could use more subtopics.
 
Fair section headings, indicative that the paper has “flow”. Topics and subtopics not clearly indicated. Unclear organization of thoughts.
 
Disorganized appearance.
Relevant topics missing or incorrect, paper has no indicative “flow”.
Not professional.

Abstract
 
Highly informative, complete and easy to understand. Appropriate vocabulary is used.
Abstract makes you want to read the paper.
Informative, complete and understandable. Appropriate vocabulary is used.
Somewhat informative and understandable.
 
Not very informative or understandable.
 

Structure
 
Thesis is clear, easy to find, and appropriate to the assignment.
Thesis is supported by the rest of the paper.
Paper contains a “roadmap” for the reader.
There is a logical “flow” to the topics/arguments. Conclusion follows clearly from the arguments presented.
Thesis is clear and appropriate.   Thesis fairly well supported.
Paper is fairly well organized.
Conclusion follows from the rest of the paper.
Thesis is fairly clear.
Inconsistent support for thesis. Paper weakly organized. Conclusion is acceptable.
Thesis unclear and/or inappropriate.
Thesis not supported.
Paper is not organized. Conclusion doesn’t follow from the rest of the paper.

Research
 
The evidence comes from a wide variety of valid sources. The bibliography is complete and reflects appropriate sources.
 
The evidence comes from the minimum valid sources. The bibliography is complete.
Valid sources are inconsistently used.  The bibliography contains minor formatting errors.
 
Multiple sources cited  incorrectly.
Bibliography missing.
 

Critical
Thinki
 
ng
Arguments are pertinent to the topic.
Arguments are logical, supported with evidence. The key arguments have been made – no major points have been left out.
Arguments are
pertinent to the topic.   Arguments are fairly logical and reasonably supported.
Most key arguments have been made.
Arguments are not consistently pertinent, logical, or supported. Few key arguments have been made.
Arguments not pertinent. Arguments rarely, if at
all, logical and supported.
Almost no key arguments have been made.