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Assignment Economics

This document provides instructions for a group assignment for an economics course. It outlines the assignment requirements, including submission date and instructions. It lists 6 discussion questions related to short run production, costs, and perfect competition. It asks students to derive functions, find output levels, price requirements, and discuss the impacts of unemployment and inflation on economic growth.

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Hana Leulseged
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© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
21 views

Assignment Economics

This document provides instructions for a group assignment for an economics course. It outlines the assignment requirements, including submission date and instructions. It lists 6 discussion questions related to short run production, costs, and perfect competition. It asks students to derive functions, find output levels, price requirements, and discuss the impacts of unemployment and inflation on economic growth.

Uploaded by

Hana Leulseged
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Addis Ababa University

College of Business and Economics


Department of Economics
__________________________________________________________________
Group Assignment for Economics (Econ 1011)
_________________________________________________________________

 Total marks: 30 points


 Submission Date: May 5, 2023

General Instructions
 Attempt to answer all questions clearly!
 Submit your assignment on the deadline!
 READ instructions carefully!
 Your hand writing should be readable (good handwriting is expected) or you can
write by computer.
 Duplication of the assignment will result zero grade.
 Maximum number of group member is 5.

 Discussion and workout Questions (show all steps of calculation clearly)

1. Which stage of short run production is efficient? Why? ( 1.5 points)


2. The short run AVC, AC and MC are all U-shaped. Why? ( 1.5 points)
3. Consider the following short run production function:
𝑄 = 6𝐿2 − 0.4𝐿3
a) Derive the functions of average product of labor and marginal product of labor. (1 point)
b) Find the output level that maximizes average product of labor and marginal product of
labor. (2 points )

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c) Find the ranges of labor employment corresponding to the three stages of production. (2
points )

4. A firm operates in a perfectly competitive market. The market price of its product is 4 birr and
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the total cost function is given by 𝑇𝐶 = 𝑄 3 − 5𝑄 2 + 20𝑄 + 50, where TC is the total cost
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and Q is the level of output.
A. What level of output should the firm produce to maximize its profit? (2 points)
B. What minimum price is required by the firm to stay in the market? ( 2 points)

5. Currently, Ethiopia faces the growing unemployment, particularly; youth unemployment


presents a particular challenge to Ethiopia; the country faces growing youth landlessness in
rural areas and insignificant urban job creation. The economic cost of unemployment is very
high, and it is a big hurdle in the path towards rapid economic development or economic
growth.

 Discuss in detail the impact of unemployment on economic growth. (4 points)


6. Price stability is one of the major goals of any country macroeconomics; but Ethiopia has been
facing a sustained rise in general price level of goods and services in 2022/23.
 Briefly discuss the causes of inflation and its effect on economic growth (4 points)

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