Illustrate and explain the concepts of Producer Surplus and Consumer Surplus

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Illustrate and explain the concepts of Producer Surplus and Consumer Surplus

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You are given the following utility function and price of commodities q1 and q2: U = 3q1+q1q2-5q2-15 P1=3 and p2=2 If the corresponding bugdet is 20. i. Write the consumer's budget equation ii.construct a constrained utility maximization problem out of the information given above iii. Write the augmented objective function? Iv. Find the optimum level of U V. Is the second order condition for a maximum satisfied? Vi. Find the levels of q1 and q2 that will satisfy the first order condition for a maximum.
The water Economist has estimated short run water responsiveness function for rice farming under major irrigation condition in the Dry Zone of Sri Lanka as follows; Y = 21W +30.3W2 – 3W3, Where Y = Output (paddy kg /Acre) , W = irrigation Water (Cubic Meter – m3) a) Determine three stages of this short run production process and graphically show the result. b) Determine rational production stage and what is the maximum and minimum output level of this rational stage. c)Determine the range of water level which is representing the low of diminishing marginal returns.
State whether the Statement is TRUE or FALSE. Also write the reason (Without reason your answer will not accepted) a) If value of cross price elasticity is positive then it means there are less close substitutes are available of that product. b) In case of luxury products, the own price elasticity of demand is greater than one. c) If salaries of journalist go up then demand curve of newspaper will shift upward d) When price elasticity of supply is greater than one it means supply curve is flatter.
With an aid of the Edgeworth box illustrate how Pareto efficient general equilibrium is achieved.
What constitutes inventory? Discuss the benefits of inventory management. ii)Discuss new developments in inventory management systems and the implications for production technique any philosophy. iii) What factors are likely to reduce the holdings of inventory in relation to sales in the future? What factors will tend to increase the ratios and what in your judgement is the net effects?
Suppose a firm finds that the marginal product of capital is 60 and the marginal product of labor is 20. If the price of capital is $6 and the price of labor is $2.50, describe how the firm should adjust its mix of capital and labor? What will be the result?
Suppose the government enacts legislation that imposes a price ceiling equivalent to the original equilibrium price. What is the result of this legislation?
A monopolist has demand and cost curves given by: _ _ QD = 10,000 - 20P TC = 1,000 + 10Q + .05Q2 i. Find the monopolist's profit-maximizing quantity and price. ii. Find the monopolist's profit.