Given the demand function P = 20 – 5Q, find the price elasticity of demand when price of the commodity is 5 Birr per unit. Mention if the demand is price elastic or inelastic at this point Suppose that the total utility function of a consumer is given by TU(x,y) = 3×2 y and the prices of X and Y are 1 Birr and 2 Birr per unit, respectively. If the income of the consumer is 600 Birr and if he spends all of his income on the consumption of commodities of X and Y, find the optimum amount of X and Y that the consumer will consume at equilibrium and find MRTSx,y. Suppose the cost function is given as C = 135 + 75Q – 15Q2 + Q3. Prepare a cost schedule (table) showing the TFC, TVC, TC, AFC, AVC, MC, and ATC. Is this cost function a short run or a long run cost function? Why? Draw the cost curves on the basis of cost data obtained from the cost function . Suppose the short run market price a competitive firm faces is Birr 9 and the total cost of the firm is: TC = 200 + Q + 0.02Q 2 . Answer the questions that follow. (A) Calculate the short run equilibrium output and profit of the firm. (B) Derive the MC, ATC, and AVC and calculate the values at the short run equilibrium output. (C) Calculate the producers’ surplus at the equilibrium output. (D) Find the output level that will make the profit of the firm zero.

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Given the demand function P = 20 – 5Q, find the price elasticity of demand when price of the commodity is 5 Birr per unit. Mention if the demand is price elastic or inelastic at this point
Suppose that the total utility function of a consumer is given by TU(x,y) = 3×2 y and the prices of X and Y are 1 Birr and 2 Birr per unit, respectively. If the income of the consumer is 600 Birr and if he spends all of his income on the consumption of commodities of X and Y, find the optimum amount of X and Y that the consumer will consume at equilibrium and find MRTSx,y.
Suppose the cost function is given as C = 135 + 75Q – 15Q2 + Q3. Prepare a cost schedule (table) showing the TFC, TVC, TC, AFC, AVC, MC, and ATC. Is this cost function a short run or a long run cost function? Why? Draw the cost curves on the basis of cost data obtained from the cost function
. Suppose the short run market price a competitive firm faces is Birr 9 and the total cost of the firm is: TC = 200 + Q + 0.02Q 2 . Answer the questions that follow.
(A) Calculate the short run equilibrium output and profit of the firm.
(B) Derive the MC, ATC, and AVC and calculate the values at the short run equilibrium output.
(C) Calculate the producers’ surplus at the equilibrium output.
(D) Find the output level that will make the profit of the firm zero.

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