Question 1 (a) Consider a group of people, and consider the relation: "more intelligent than". Is this relation reflexive? (b) Explain the statement that averages are preferred to extremes when an individual's preferences are convex. (c) Explain how the imposition of a quantity tax in a competitive market affects the consumers' and producers' surpluses. (d) Show that the production function, y = ?/5x22/3, exhibits increasing returns to scale. (e) A firm's average cost function is given by 8(y + 9/y), where y is output. Find the firm's marginal cost for the output level at which its average cost is minimised.

Question 1 (a) Consider a group of people, and consider the relation: "more intelligent than". Is this relation reflexive? (b) Explain the statement that averages are preferred to extremes when an individual's preferences are convex. (c) Explain how the imposition of a quantity tax in a competitive market affects the consumers' and producers' surpluses. (d) Show that the production function, y = ?/5x22/3, exhibits increasing returns to scale. (e) A firm's average cost function is given by 8(y + 9/y), where y is output. Find the firm's marginal cost for the output level at which its average cost is minimised.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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