Assignment help-TECO101 Microeconomics Principles

Assignment help-TECO101 Microeconomics Principles

Major Assignment
Unit: TECO101 Microeconomics Principles
Due Date: By 10:30 am Wednesday, 25th January,
Total Marks: 100 marks (20%)
Number of Questions: Four (4) Questions
Instructions: All questions should be attempted.
The marks of each question would be awarded based on your
understanding of the questions, concepts and procedures; hence
you should demonstrate your answers step by step.
The assignment should be a professional document. Only use A4-size white paper with TYPED
answers on SINGLE-SIDED pages.
The assignment is worth 20% of the total mark for the unit. The marks awarded will depend on the
quality of the reasoning exhibited and the ability to express the argument in a concise manner.
Due date:
The assignment must be submitted on or before 10:30am Wednesday, 25th January, 2017.
Late submission – it is TOP policy that assignments cannot be submitted late without prior
approval of the unit coordinator and only in extenuating circumstances supported by
evidence. Assignments submitted late without prior approval will not be graded.
Cover sheet:
Use the cover sheet provided on Moodle System. All relevant details requested on this sheet must be
supplied (in particular, your subject code TECO101 and your tutor’s name). Each student must sign
the statement on the cover sheet to acknowledge that the work submitted is the student’s own work.
1. your assignment is missing this cover sheet,
2. important information is missing, and
3. you did not sign the acknowledgement on the cover sheet.
A hardcopy of the WHOLE completed assignment of each question with coversheet must be
submitted to your Lecturer or Tutors.
At the same day by 11:55pm, you MUST submit an electronic copy through TURNITIN on
Moodle for checking plagiarism. Failure to submit it may result in a zero mark for the entire
You MUST ensure that all pages are securely and properly fastened with staples (not paper clips!)
and submitted WITHOUT a folder. Do NOT include this document in your assignment when
submitting. You MUST keep a copy of the assignment you submit.
Question 1 (25 marks)
For the pizza seller whose marginal, average variable and average total cost curves are shown
in the diagram,
$/slice MC
260 435
What is the profit-maximising level of output and how much profit will this producer earn if
the price of pizza is $1.18 per slice?
Question 2 (25 marks)
Think about the demand for the three popular game consoles: XBox, PS3, and Wii. Using
supply and demand diagrams to illustrate your answers, what is the effect on the demand for
XBox games or the quantity demanded of XBox games (other things remaining the same) as
a result of the following:
a) The price of an XBox falls?
b) The prices of a PS3 and a Wii fall?
c) Programmers who write code for XBox games become more costly to hire?
Question 3 (25 marks)
Kim can produce 40 pies or 400 cakes an hour. Liam can produce 100 pies or 200 cakes an
a) If Kim and Liam spend 30 minutes of each hour producing pies and 30 minutes producing
cakes, how many pies and cakes does each of them produce?
b) Who has a comparative advantage in producing pies, and in producing cakes?
c) If Kim and Liam specialise and trade, what is the highest price of a pie at which Kim
and Liam would agree to trade pies and cakes? What are the gains from trade?
Question 4 (25 marks)
Suppose that United Airlines and American Airlines are the only air carriers that serve
between New York and Boston. Each currently earns a profit of $6,000 per flight on this
route. If United increases its advertising spending in this market by $1,000 per flight, and
American spends no more on advertising than it does now, United’s profit will rise to $8,000
per flight and American’s will fall to $2,000. If both spend $1,000 more on advertising, each
will earn an economic profit of $5,500 per flight. These payoffs are symmetric, so that if
United spends the same amount on advertising while American increases its spending by
$1,000, United’s economic profit will fall to $2,000 per flight and American’s will rise to
American’s Choices
Raising Spending Leave spending as same
Raising $5500 for United $8000 for United
United Spending $5500 for American $2000 for American
Leave spending $2000 for United $6000 for United
as same $8000 for American $6000 for American
a) Does each player have a dominant strategy?
b) What are the potential equilibriums?
c) Is this game a prisoner’s dilemma? Explain

Assignment help-TECO101 Microeconomics Principles


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