Macro & Micro economics

Macro & Micro economics

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Project description
Question-1: Define and explain the Law of Diminishing Marginal Utility (DMU)? By keeping in view the concepts of Marginal Utility (MU) and Total Utility (TU), complete the following table and answer the questions given below the table.
(2 x 4 = 8 marks)
Units Consumed of Good ATotal Utility(TU)Marginal Utility(MU)
120
235
345
450
550
645
735

a.What is the Marginal Utility by consuming 3 units of good A?
b.At what level of consumption, Marginal utility will be Zero?
c.At what level of consumption, Total Utility will reaches at Maximum?
d.At what level of consumption, Marginal utility is Negative?
Question-2: (a): Define and explain Theory of Marginal Productivity?
(b):A Firm in Construction Sector is producing a Good X and selling it in the market at P = 10 Dh/unit. The wage rate is fixed at W = 500 Dh. complete the following table and answer to the questions given at the end of below table; (2 x 4 = 8 marks)
LTPMPLVMPL Wage Rate (W)Marginal Profit
00————
1100500
2180500
3240500
4280500
5300500

(c)How much labor (L) will be employed by this Firm?

Question-3: Total Cost Function is given below;
TC = 100 + 5Q + 2.5Q2 (8 marks)

If the output level; Q = 10 units, find the followings;
a.Total Cost (TC)
b.Total Fixed Cost (TFC)
c.Total Variable Cost (TVC)
d.Marginal Cost (MC)
e.Average Total Cost (ATC)

Question-4: Define Indifference Curve and what are the main properties of Indifference Curve? By using Indifference Curve analysis explain how the consumer attains maximum level of satisfaction? (2 + 6 = 8 marks)

Question-5: What is difference between Perfect Competition and Monopoly? Give main characteristics of perfectly competitive and monopolist markets. How output and profit level is determined in both of the markets?