Economics of Enterprise Answers

1. Discuss the recent trends in India’s foreign trade.

2. Write an essay on New Agriculture Bill 2020. What are the challenges and concerns for its effective implementation?

Maximum word limit 2000 for each question.

Why a student of Economics should study the subject of marketing

Internationalcrude oil prices have climbed up to an all-time high of $105 a barrel for the first time since 2014 after failure of diplomatic efforts between Russia and Ukraine failed resulting into military conflict. This has resulted into crude oil prices and the resulting pump prices for consumers going up globally. Analysts have predicted that the prices will rise much higher amid fears of major disruption to the global energy supply

chain. Russia is one of the world’s largest producers of oil and natural gas and disruptions in its output.

(a) Discuss briefly the difference between ‘spot price’ and ‘future price’

(b) Do you support GRZ’s Fuel Subsidy Removal policy? Why? Explain with one paragraph.

(c) Suppose that you are the owner and manager of a small business (Give it a name for your hypothetical business). Briefly explain how a hike in fuel prices would affect your business costs, sales, competitiveness, and profit. Use one paragraph.

Trade Kings, one of the biggest companies in Zambia, has hired you to advise them on pricing policy. One of the things the company would like to know is how much a 1.5 percent increase in prices of all the goods they are selling arelikely to affect sales. What critical information you have to have in order to appropriately advice the company? Explain why these facts are important.

A discriminatory movie monopolist sells the service to college students and lecturers. The demand function for students is 𝑄s = 200 − 25𝑃 and the demand function for lecturers is

𝑄l = 400 − 25P. Marginal cost is $5 per ticket.

(a) Which degree (type) of price discrimination the monopolist applied? Why?

(b) Calculate the amount of ticket the firm sells for students.

(c) Calculate the amount of ticket the firm sells for lecturers.

1. Suppose you are the manager of a Golf Club with monopoly power. A typical consumer’s

inverse demand function for your firm’s product is 𝑃 = 100 − 20𝑄, and your cost function is C(Q) = 20Q.

(a) If you apply a two-part pricing strategy, how much would be the membership fee and the per unit price?

(b) How much additional profit do you earn using a two-part pricing strategy compared with single price strategy?

Currently, the demand equation for necklaces is Q = 30 – 4P. The current price is $10 per necklace.

a. Is this the best price to charge in order to maximize revenues?

b. If $10 per necklace is not the best price, what is?

A loan of P5,000 is made for a period of 15 months, at a simple interest rate of 15%, what future amount is due at the end of the loan period?

A person has made an arrangement to borrow $1,000 now and another $1,000 two years hence. The entire obligation is to be repaid at the end of four years. If the projected interest rates in years one, two, three, and four are 10%, 12%, 12%, and 14%, respectively, how much must this person repay as a lump-sum amount at the end of four years?

In July 2021 the country witnessed unprecedented looting sprees of shopping malls and

centres in parts of KwaZulu Natal and Gauteng provinces which sadly resulted in the loss of

lives and whose economic impact will be felt for some time to come. For the first time, the term

‘supply chain’ was used so much in the media that the average South African citizen came to

appreciate the role of supply chains in the economy. In discussing, some of the points make

references to other sources to support your statements

 1. Illustrate and briefly describe one of the supply chains, which were disrupted by the ‘July

riots’

 2. Explain how the following factors affecting the distribution of network design were

disrupted: Value provided to the customer and cost of meeting customer needs.

 3. What are the effect of logistics activities on customer satisfaction?

 4. Provide recommendations to resolve logistics issues encountered in the supply chain

described in question one?