 |
AMI810S-ADVANCED MICROECONOMICS-2ND OPP-JULY 2025 |
|
|
1 Page 1 |
▲back to top |
nAmI BIAunIVE Rs ITY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OFCOMMERCE, HUMAN SCIENCE AND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING AND FINANCE
QUALIFICATION BACHELOR OF ECONOMICS HONOURS DEGREE
QUALIFICATION CODE: 07BECO
LEVEL: 8
COURSE CODE: AMl810S
COURSE NAME: ADVANCED MICROECONOMICS
SESSION: JULY 2025
DURATION: 3 HOURS
PAPER: THEORY
MARKS: 100
EXAMINER(S}
SECOND OPPORTUNITY EXAMINATION QUESTION
MR. PINEHAS NANGULA
MODERATOR: DR RUTH EEGUNJOBI
INSTRUCTIONS
1. Answer ALL the questions.
2. Write clearly and neatly.
3. Number the answers clearly.
PERMISSIBLE MATERIALS
1. Scientific calculator
2. Pen and Pencil
3. Ruler
THIS QUESTION PAPER CONSISTS OF _3_ PAGES (Including this front page)
|
|
2 Page 2 |
▲back to top |
QUESTION ONE
[25 MARKS]
The government is planning to introduce a ban on the importation of potatoes between June
2025 and August 2025. The domestic demand function for potatoes is Qd = 250 - 4P, the
= domestic supply function for potatoes
importing potatoes isQ5 = -50 + 3P.
is
Q5
-50 + 3P and the foreign supply function for
Analyse the impact of this government policy on the Namibian economy.
[25 marks]
QUESTION TWO
[25 MARKS]
Martha has the utility function U(x,y) = 0.Sx 2y4, where x denotes the amount of food
consumed and y the amount of clothing. Now suppose that he has an income ofN$450.00 per
week and that the price of clothing is Py = N$10 per unit. Suppose that the price of food is
initially P.d = N$25 per unit and that the price subsequently falls to Px2=N$5 per unit.
Find the numerical values of the income and substitution effects on food consumption and
graph the results. Let unit of food be on the x-axis.
QUESTION THREE ·
[25 MARKS]
A homogeneous products duopoly faces a market demand function given by P = 500 - SQ,
where Q = Ql + 02. Both firms have a constant marginal cost MC= 80.
a) What is Firm i's profit-maximizing quantity, given that Firm 2 produces an output of 60
units per year? What is Firm l's profit-maximizing quantity when Firm 2 produces 30 units
per year?
[5 marks]
b) Derive the equation of each firm's reaction curve and then graph these curves.
[5 marks]
c) What is the Cournot equilibrium quantity per firm and price in this market?
[5 marks]
d) What would the equilibrium price in this market be if it were perfectly competitive?
[5 marks]
e) What would the equilibrium price in this market be if the two firms colluded to set the
monopoly price?
[5 marks]
Question Four
[25 marks]
John has the utility function U(x, y) = 2xy, where x denotes the amount of beer consumed and
y the amount of wine. Now suppose that he has an income of $72 per week and that the price
of wine is Py = N$1 per unit. Suppose that the price of beer is initially Px1 = N$9 per unit and
that the price subsequently falls to Px2 =N$4 per unit. Let good x be on the x-axis. Is good x a
normal, inferior or giffen good?
All the best