Microeconomics Assignment: Economic Principles and Analysis

This economics assignment delves into microeconomic principles, examining concepts such as cost analysis, profit maximization, and market dynamics. The assignment explores the implications of isocost curves and the impact of wages on production costs, as well as the relationship between marginal cost and marginal revenue. It analyzes the effects of bidding wars on consumer and producer surplus, and the role of government regulations and the internet on market efficiency. The assignment also addresses Pareto efficiency and the effects of mass production on costs. Overall, this assignment provides a detailed analysis of microeconomic concepts. The assignment is available on Desklib, a platform providing resources for students.

This quote implies that a man is a king of its own property. The property ownership and
protection is tied to the owner and not any other superior power or administration. No superior or
officers should gain access to a citizen’s private property without the owners (the king)
permission.
The implications of this speech apply to my country quite directly. Every individual has a right
to privacy encompassing the searching of their property, seizing of an individual’s possession,
disclosing an individual private affair and compromising the privacy of their communication.
Pirate ships are those which contain pirates who use the ships to attack other ships with the
motive of stealing, doing harm or kidnaping. The attack is conducted for their personal gain. The
pirates function contrary to the authority of any government. The pirates attack ta the ports and
other places. A firm must be registered by the government under the law therefore pirate ships
doesn’t accomplish the features of a firm.
a)
b) Technology B is dominant because it utilizes less workers to complete the job within less
time. The assembly was quickly adopted to avoid spending more on workers salaries.
c)
It is clear that the isocost curve rises with increase in the workers’ pay scales.
Technology B
Technology A
Number of Workers
Technology
wages
Technology

d) As the wages grow, the farmers are bound to earn more for the resource used in place. In this
case, the use of more specialized employees is bond to increase the quality of the cars in
production which may have a positive impact on the price of the cars. This means that the
business is bound to have a larger return to its owners despite the increase in wages.
2.
b) In this case the profit is maximized where MC = MR. This means that the marginal cost of
production is equal to the marginal revenue charged on the users. This was possible in Ford’s
case since the cars were priced according the differentiated nature of the buyers. This meant that
all individuals interested in buying cars bought it at the level at which they could afford it.
3. a) The bidding wars increased the priced for which the cars were sold and reduced consumer
surplus while increasing producer surplus. This meant that it provided the opportunity for the
customers to be overcharged. The firms therefore experienced more distributions of gains from
the trade compared to the users.

b) The law ensured that there was more efficient distribution of the gains obtained from
the sale on both the customer as well as the sellers. It therefore ensured that the prices were far
much less exaggerated and that there was equity between the sellers and buyers of the cars.

c) The internet increases the size of the market by making other interested buyers aware
of the product. It therefore increases the demand of the cars. However the internet also increases
the level of information that the customers have about prices and quality of cars. This affects the
price of the cars and reduces the producer surplus.
d) According to Pareto efficiency, goods may not be reallocated in such a way that everyone is
made better off. In this case, c is the pareto efficient distribution since it allocates most value to
the person with the highest utility instead of that one who has the most value for it.
4.

In the case of mass production, the costs are often lower as the quantity produced increases. In
the case of marginal costs, the marginal costs therefore increases as the quantity of goods
increases. This is because of the average variable costs increase compared to the average costs
increase.
References
Okun, A.M., 2015. Equality and efficiency: The big tradeoff. Brookings Institution Press.
Nicholson, W. and Snyder, C., 2014. Microeconomic theory. 北北北北北北北.