Microeconomics. Collection of Tasks and Cases = Микроэкономика. Сборник задач и кейсов

МИНИСТЕРСТВО НАУКИ И ВЫСШЕГО ОБРАЗОВАНИЯ 

РОССИЙСКОЙ ФЕДЕРАЦИИ 

Федеральное государственное автономное  

образовательное учреждение высшего образования 

«ПЕРМСКИЙ ГОСУДАРСТВЕННЫЙ  

НАЦИОНАЛЬНЫЙ ИССЛЕДОВАТЕЛЬСКИЙ УНИВЕРСИТЕТ» 

 
 
 
 
 

Е. А. Третьякова 

 

MICROECONOMICS 

 

COLLECTION OF TASKS AND CASES 

 

____________________________________________________________________ 

 

МИКРОЭКОНОМИКА 

 

СБОРНИК ЗАДАЧ И КЕЙСОВ 

 

 
 
 

Допущено методическим советом 

Пермского государственного национального 
исследовательского университета в качестве 
учебно-методического пособия для студентов,  

обучающихся по направлению подготовки бакалавров  

«Экономика» 

 
 
 
 

 

Пермь 2023 
 

УДК 330.1 
ББК 65.01 

Т666 

 

Т666

Третьякова Е. А.

Microeconomics. Collection of Tasks and Cases
= Микроэкономика. 

Сборник задач и кейсов [Электронный ресурс] : учебно-методическое 
пособие / Е. А. Третьякова ; Пермский государственный национальный 
исследовательский университет. – Электронные данные. – Пермь, 
2023. 
–
1,59
Мб 
; 
90
с. 
–
Режим 
доступа:

http://www.psu.ru/files/docs/science/books/uchebnie-posobiya/TretyakovaMikroekonomika-Sbornik-zadach.pdf. – Заглавие с экрана. 

ISBN 978-5-7944-3947-2

 

Пособие включает основные разделы курса микроэкономики (экономической 

теории) для бакалавров. Представленные материалы способствуют закреплению 
теоретических знаний, приобретению умений и навыков решения типовых 
экономических задач. 

Предназначено для студентов высших учебных заведений, обучающихся по 

экономическим и управленческим направлениям и специальностям подготовки. Может 
быть полезно преподавателям вузов и колледжей, практическим работникам. 

 
The handbook includes the main sections of the course of microeconomics for 

bachelors. The presented materials contribute to the consolidation of theoretical knowledge, 
the formation of skills and abilities to solve economic problems. 

The handbook is intended for students of higher educational institutions studying in 

economics and management. It can be useful for universities and colleges teachers of and 
practical workers. 

 

УДК 330.1 
ББК 65.01 

 

Издается по решению ученого совета экономического факультета  

Пермского государственного национального исследовательского университета 

 

Рецензенты:
кафедра экономики и управления промышленным производством Пермского национального исследовательского политехнического университета (зав. кафедрой – д-р экон. наук, доцент 
Е. Е. Жуланов

декан факультета социально-экономических и компьютерных 
наук Пермского филиала НИУ Высшая школа экономики, канд. 
экон. наук, доцент О. Ю. Исопескуль

 

ISBN 978-5-7944-3947-2

© ПГНИУ, 2023
© Третьякова Е. А., 2023 

CONTENTS 

 

Part 1. Introduction to Economics ..................................................................... 4 

Topic 1. Economics and Economic Systems .......................................... 4 

Topic 2. Market as a form of social economy ....................................... 11 

Topic 3. Market and market Equilibrium .............................................. 13 

Topic 4. Elasticity of Supply and Demand ........................................... 20 

Part 2. Microeconomics of Product Markets .................................................. 28 

Topic 5. Consumer Behavior ................................................................ 28 

Topic 6. Producer Behaviour ................................................................ 32 

Topic 7. Costs and Profits of the Firm .................................................. 35 

Topic 8. Pure Competition .................................................................... 41 

Topic 9. Imperfect Competition ............................................................ 44 

Part 3. Microeconomics of resource Markets ................................................. 49 

Topic 10. Characteristics of resource Markets ...................................... 49 

Topic 11. Labour Market ...................................................................... 51 

Topic 12. Capital Market ...................................................................... 55 

Topic 13. Land Market .......................................................................... 63 

Part 4. Market and Government ...................................................................... 65 

Topic 14. Government regulation of the market ................................... 65 

Topic 15. Market Failure and Government Failure .............................. 70 

Answers to the tasks for self-solution ............................................................. 79 

List of basic and additional educational literature.......................................... 87 

The List of Internet Resources necessary for the study of the discipline ..... 89 

 
 
 

PART 1. INTRODUCTION TO ECONOMICS

 
 

Topic 1. Economics and Economic Systems 

 

Key terms on the topic

Economics is the social science that studies the production, distribution, 

and consumption of goods and services. 

Microeconomics is a branch of mainstream economics that studies the 

behavior of individuals and firms in making decisions regarding the allocation of 
scarce resources and the interactions among these individuals and firms. 
Microeconomics focuses on the study of individual markets, sectors or industries. 

Demand is the desire and willingness to buy a particular good or service 

supported by the necessary money to buy it. 

Free goods are goods that are so widely distributed that their cost is 

practically nothing, and therefore there is no need for their production. 

Economic goods are the result of economic activity, and they are 

obtainable only in a quantity which is limited compared to the demand in them. 

Interchangeable goods (goods-substitutes) are goods those can be used 

for reaching the same purpose because they meet the same wants. 

Complementary goods are those that meet people's needs only when used 

together. 

Private good is a good that is consumed individually by the person who 

paid for it. 

Public good is a good that is collectively consumed by all citizens, whether 

they pay for it or not. 

Resources (factors of production) are what is applied and spent in the 

production process. 

Household is a group of people who live in the same living space (share 

accommodation), share everything they need to live together, and completely or 
partially combine and spend their money. 

Firm (business) is an agent that uses resources to produce goods or 

services to maximize its profits, and which owns and operates one or more 
companies. 

State (Government) is a set of state institutions and organizations that 

have the political and legal right to influence the course of economic processes 
and regulate the economy. 

Traditional economy is an economic system in which traditions and 

customs determine the use of scarce natural resources. 

Centralized (command) economy is an economy controlled by state 

bodies on the basis of policy plans and programs, direct subordination junior 
bodies to senior ones, and state ownership of means of production. 

Market economy is an economy based on the principles of free enterprise, 

various forms of ownership of the means of production, market pricing, 
contractual relations between business entities and limited state interference with 
economic activity. 

Mixed economy is a market economy with certain features of traditional 

economy and elements of centralized governance management. 

Production possibility curve (PPC) or a production-possibility frontier 

(PPF) is a curve that graphically shows different combinations of simultaneous 
production quantities of two products (or two groups of products) with a certain 
quantity of resources spent on the production of these products and the same 
technology. 

Inputs are commodities that are used to produce goods and services. 
Outputs are the various useful goods or services that result from the 

production process and are either consumed or employed in further production. 

Opportunity costs are an economic term that refers to the lost benefit 

resulting from choosing one of the alternative uses of resources and thus 
abandoning other opportunities. 

 
 

Example of solving the task

 

Task 1.1. 
 
Given: 

The equation of curve of production possibility (PPC) is 5∙x + 4∙y2= 100, where 
x and y are measured in hundreds of units. 

 
Find: 

1) the maximum quantity of good x, which can be produced;  
2) the maximum quantity of good y, which can be produced;  
3) the opportunity costs of production of the fourth unit of good y;  
4) the opportunity costs of production of the fourth unit of good x;  
5) the new equation of the PPC, if the new production technology will allow the 
production of good y twice as much; 
6) the new equation of the PPC, if the new production technology will allow the 
production of good x twice as much. 

Solution: 

1) The original equation is 5∙х + 4у2= 
100.

If an economic system produces 

the maximum quantity of good x, it 
cannot produce good y (Point B on 
Fig. 1). 

Therefore, the quantity of the good 

y is zero. Then the maximum quantity of 
product x equals 20 hundreds of units:

5∙x + 0 = 100
xmax = 20 units.

2) If an economic system produces the 
maximum quantity of good y, it cannot 
produce good x (Point A on Fig. 1). 

Fig. 1. Production possibility curve (PPC)

Therefore, the quantity of the good x is zero. Then the maximum quantity 

of product y equals 5 hundreds of units: 

0 + 4∙у2= 100 

у2 = 25 

ymax = 5 hundreds of units. 

3) To find opportunity production costs of the fourth unit of product y need to 
calculate the quantity of produced good x in the production of three units of good 
y and the quantity of produced good x in the production of four units of good y. 
Then we will use the difference between these quantities to find these opportunity 
costs which are equal to 5.6 hundreds of units: 

At y = 3:  5∙х + 4∙32= 100; х (at y = 3) = 12.8 hundreds of units. 
At y = 4:  5∙х + 4∙42= 100; х (at y = 4) = 7.2 hundreds of units. 

Consequently, the opportunity costs of the fourth unit of good y are equal:  

OCY = х (at y = 4) - х (at y = 3) = 12.8 - 7.2 = 5.6 hundreds of units of good х 

4) To find opportunity production costs of the fourth unit of product x need to 
calculate the quantity of produced good y in the production of three units of good 
x and the quantity of produced good y in the production of four units of good x. 
Then we will use the difference between these quantities to find these opportunity 
costs which are equal to 0.1 hundreds of units: 

At x = 3: 
5∙3 + 4∙у 2= 100;  у 2=21.25; у (at x = 3) = 4.6 hundreds of units. 

At x = 4: 
5∙4 + 4∙у 2= 100; у 2=20;  
у (at x = 4) = 4.5 hundreds of units. 

Consequently, the opportunity costs of the fourth unit of good х are equal:  

OCX = у (at x = 4) - у (at x = 3) = 4.6 - 4.5 = 0.1 hundreds of units of good y. 

5) The original equation has the form: 5∙х + 4∙у2 = 100, where the resource costs 
for one unit of product x are 5, and for one unit of product y are two. 

In order to produce twice as much goods from the same amount of resources, 

we need to reduce the cost of resources for the production of a unit of production 
twice. From here we get new equations of the curve if the new production 
technology will allow the production of good y twice as much: 5∙х + у2 = 100. 
6) Similarly, we find a new equation of the curve if the new production 
technology will allow us to produce a good х twice as much: 2.5∙х + 4∙у2 = 100. 

 
 
 

Task for the self-solution

 
Task 1.2. 
 
Given: 

The equation of curve of production possibility (PPC) is 9∙x2 + y = 900, where x 
and y are measured in hundreds of units. 

Find:  

1) the maximum quantity of good x, which can be produced;  
2) the maximum quantity of good y, which can be produced;  
3) the new equation of the PPC, if the new production technology will allow the 
production of good y twice as much. 

 
 

Case study

 

Case 1.1.1 

Identify the elements of scarcity, choice, and opportunity cost in each of 

the following: 

1. The Environmental Protection Agency is considering an order that a 500
acre area on the outskirts of a large city be preserved in its natural state, because 
the area is home to a rodent that is considered an endangered species. Developers 
had planned to build a housing development on the land. 

2. The manager of an automobile assembly plant is considering whether to 

produce cars or sport utility vehicles (SUVs) next month. Assume that the 
quantities of labor and other materials required would be the same for either type 
of production. 

3. A young man who went to work as a nurses’ aide after graduating from 

high school leaves his job to go to college, where he will obtain training as a 
registered nurse. 

 

1 Rittenberg L., Tregarthen T. Microeconomics Principles. 2012. P 14. 

Case 1.2. 

Economic Transition in Cuba1 

 
Cuba has been ruled by the Communist party since Fidel Castro’s 

revolution in 1959. It is one of the few countries that still has a planned socialist 
system. Over 80 percent of Cuban workers are employed in the public sector, and 
the state controls all major industries. The country has a national healthcare 
program, free public education, and subsidized housing, transportation, and 
utilities. While the wages of Cuban workers (mostly set by the state) are low, 
employment guarantee and substantial social programs provides most with access 
to basic necessities. However, like other one-party communist states, there is 
limited freedom of expression with state-controlled media, limited access to the 
internet, and restrictions on political rights and civil liberties. Also, with poor 
infrastructure and lack of access to technology, the overall living standards in the 
country are still poor.  

One of the key strengths of the Cuban economy is that it has produced an 

extremely well-trained workforce with significant investments in human capital 
(education and healthcare) over time. In fact, one of its main sources of revenue 
is the export of health services by sending nurses, physicians, and healthcare 
technicians to Brazil, Venezuela, South Africa, and other countries. Tourism and 
remittances are other key sources of revenue for Cuba.  

The country’s economy has, however, been suffering since 2008 with 

slowdown in overall growth With the recent covid crisis, the economy has 
plunged, with growth in 2020 declining by 11 percent for the first time–much 
higher than the declines experienced in most other countries. For example, GDP 
declined by 3.5 percent in the United States, 2.8 percent in Sweden, 3 percent in 
Russia, 4 percent in Brazil and 8 percent in India. 

Cuba is also highly vulnerable to external trade shocks and is reliant on 

imports for some essential goods such as fuels, food, and machinery. The country 
has also suffered economically due to the US embargo that restricts exports and 
travel to the country–the economic cost of the embargo is estimated to be about 
$130 billion, according to the United Nations. Additionally, the government has 
been struggling to support its large social programs. Between 2008 and 2016, 
Cuba’s total debt increased by 56.9 percent (from $11.6 billion to $18.2 billion) 

 

1 Comparative Economic Systems: Capitalism and Socialism in the 21st Century. – Boston; Global 
Development Policy Center, Boston University, 2021. – P. 41–43. 

amounting to about 20 percent of the country’s GDP. The overall debt has 
declined in more recent years, through debt write-offs from China, Mexico, 
Russia, and some of its other creditors. In recent years, there has also been an 
increase in inequality, and a deterioration in the quality of public services.  

With these difficulties, the country has been gradually transitioning to a 

more market- based economy. In 2010, President Raúl Castro introduced reforms 
that removed state control of smaller firms, made it easier for workers to be selfemployed, and allowed market freedom in tourism, and export industries. 
The country has also established tax free special zones to encourage foreign 
investments. Another set of reforms were implemented in 2020, by the current 
President Miguel Díaz-Canel to address the recent downturn. These reforms 
include expansion of the list of industries that are allowed to privatize, removal 
of subsidies on a wide range of goods, and cut down in some of the social 
programs.  

With these reforms, some have argued the Cuban economy is transitioning 

towards capitalism. The government, however, maintains that the intent of the 
reforms is to preserve socialism, while integrating into a capitalist world. Given 
that the overall size of the private sector in Cuba is still quite small, and the 
communist party still has a monopoly over the political process and economic 
decisions, the country is far from transitioning to capitalism 

Questions: 
1. What type of economic system are we talking about? 
2. What are the advantages of the Cuban economy? 
3. What are the disadvantages of the Cuban economy? 
 
 
 

Topic 2. Market as a form of social economy 

 

Key terms on the topic

 
Natural economy is an economy that meets all its needs through 

independent production. 

Commodity economy is a type of economy in which production is market
oriented. 

Goods are things that satisfy human wants and provide utility. 
Market is an economic relationship between sellers and buyers of goods 

and services, which results in the formation of the demand, supply and price. 

Competition is a contest between producers (sellers) for markets in order 

to obtain higher income, profits and other benefits. 

Price competition is the competition which is realized through price 

reduction. 

Non-price competition is competition realized by improving product 

quality and sales conditions, prices remaining constant. 

Fair competition means competition happening in accordance with the 

established rules. 

Unfair competition is a competition whose participants violate rules and 

norms of competition adopted on a market, collude against other competitors, try 
to compromise them, use false advertising of their products, set dumping prices. 

Money is a special kind of universal commodity, used as a universal 

equivalent, through which the value of all other goods is expressed. 

The creation of money is the issue of all forms of money into circulation. 
Full-bodied money is money whose nominal value corresponds to the 

precious metal content in it. 

Symbolic money is an instrument of payment, whose purchase cost 

significantly exceeds the cost of their production or the effect of their alternative 
use not as money. 

Cash is money in the form of paper money and coins.