Question 1 The Manzini family consumes 730 loaves of bread per year at 19.00 per loaf. If the price elasticity of demand

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Question 1 The Manzini Family Consumes 730 Loaves Of Bread Per Year At 19 00 Per Loaf If The Price Elasticity Of Demand 1 (41.09 KiB) Viewed 44 times

Question 1 The Manzini family consumes 730 loaves of bread per year at 19.00 per loaf. If the price elasticity of demand for bread is -0.07; What will the consumption and cost be if the price of bread increases to E10.00? (4) ii) Indicate what the percentage increase in price and the percentage fall in demand will be given a) above. (2) iii) How would you explain the price elasticity of demand for bread for this family? (2) Question 2 Sibusiso has the utility function U = 3x1/44y1/4 and a budget M = PxX + Pyy. Derive the Marshallian demand curves for goods X and Y. (15) Question 3 Given the production function Q = 31/32/3, a) Derive the marginal product for the input factors, Capital (K) and Labour (L). (6) b) If the level of output (Q) is specified as 9 Units per month and that the firm uses 3 units of labour, what is the amount of capital used? (3) c) Compute the Marginal Rate of Technical Substitution (MRTS) of Capital for Labour and explain what it means. (4) d) Determine the returns to scale of the Cobb Douglas production function if the firm was to double its input usage. (4)