1. Explain the definition and assumptions of law of demand. Discuss also the exceptional casesparadoxical to the law of demand2. Many owners of small businesses do not pay themselves a salary. What effect will thispractice have on the calculation of the firm's accounting profit? Economic profit? Explain.3. Define the concept of scarcity. Explain the significance of this concept in relation to theconcept of opportunity cost. What are your opportunity costs of attending Evening class at AmboUniversity Woliso Campus?4. Explain the major determinants of demand and supply theorotically.Support your explanationby graph.5. Suppose that the unit price of a commodity of firm X is defined by: P = 90 – Q and the totalcost of producing this commodity is defined by the cost function: TC = 100 + 0.5Q², computei. Total Revenue (TR)ii. Marginal Revenue(MR) and interpret the resultiii. Marginal cost (MC) and interprets the resultiv. Find the level of output and price which maximize profit.v. Find the maximum profitvi. Check the second order condition

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1. Explain the definition and assumptions of law of demand. Discuss also the exceptional cases paradoxical to the law of demand

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 1.3P

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