University of Dundee Microeconomics Questions I need help with 9 questions, answers and solutions how to solve these questions and get the right answers. A

University of Dundee Microeconomics Questions I need help with 9 questions, answers and solutions how to solve these questions and get the right answers. Also graphs. Question 2
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In your own words explain when a firm should shut
down production in the long term and the short term.
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a) Bob owns a factory that produces fur hats with the following cost function: Total cost= 100 +8q+q2.
He also faces a demand function given by P = 80 – Q. He is the only producer. Calculate how many hats
he will produce and for what price.
b) It turns out that Bob has been using the fur from local beavers to make his fur hats. The city loves beavers
for the beauty that they provide to the local landscape and it is estimated that each beaver produces $10
worth of value for the city. Bob uses one beaver to make a hat. In this case, what is the socially optimal
amount of hats to produce? (show graph)
c) What should the city do to maximize efficiency?
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b)
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a) Mantas owns a factory that produces lemonade with
the following cost function: Total cost : 25 + 92. He
also faces a demand function given by P = 60 – Q.
He is the only producer. Calculate how many bottles of
lemonade he will produce and for what price.
b) Would you recommend that the government put a
price ceiling on lemonade? At what price? (Draw a
graph of the situation after the price ceiling: include
quantity produced, and show the DWL)
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a)
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b)
The table below lists the production possibilities (in millions of bottles) for Lithuania and Estonia regarding
bottled water and Vodka production:
Estonia Lithuanla
Water 500 800
Vodka 300
400
a) who has comparative advantage in what?
b) If both Lithuania and Estonia are consuming 400 bottles of water each in autarky (situation of no trade),
can you find a trading solution which is a Pareto Improvement? Fill in the table with your proposta solution.
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Lithuania Estonia
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Vodka
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You own a coffee shop and you are trying figure out how many employees to hire. You have a production
function of C = 121–12 where C=number of coffees produced and L=number of employees (per hour).
The market price of coffee is $3. The market wage for employees is $6/hour. Draw a graph of the supply and
demand for labor (label everything). How many workers should you hire?
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