Economics of Enterprise Answers

Draw a circular flow diagram. Identify the parts of the model that correspond to the flow of goods and services and the flow of money for each of the following activities:

a) Joe pays $8 for buying a coffee at Starbucks.
b) Joe earns $50 per hour working as an accountant to Deloitte.

Your parents gave you 200 KD. You have a choice between spending the money now or investing your money and buy shares of a company. You will receive 20 KD as a dividend after one year.

a) What is the opportunity cost of spending 200 KD now? (10 points)

b) Based on your understanding define opportunity cost. Justify your answer with an example. (20 points)

. Mr. Ali has Rs. 35000 income per month, the expenditure on pulses is 2000, when income
rises to 40000, the expenditure on pulses reduces to 1500 rupees, categorize the pulses as
inferior, superior or normal good.

Why presence of natural resource is not precondition for economic development

what is inflation

Revenue at a major cellular telephone manufacturer was $2.3 billion for the nine months

ending March 2, up 85 percent over revenues for the same period last year. Management

attributes the increase in revenues to a 108 percent increase in shipments, despite a 21 percent drop in the average blended selling price of its line of phones. Given this information, is it surprising that the company’s revenue increased when it decreased the average selling price of its phones? Explain.

Management of AG Travel and Tour has identified two groups of individuals that

would be interested in the vacation package consisting of room and board and/or

entertainment. The maximum amount that group 1 is willing to pay for room and

board is GHC 2500 and for entertainment is GHC 500. For group 2, the maximum

amount they are willing to pay for room and board is GHC 1800 and for

entertainment is GHC 750. Although AG Travel and Tour is not able to identify

members of either group, it does know that each group values the components of

the package differently. Assuming there are an equal number of members in each

group and that the total membership in each group is a single individual. If the

marginal cost of providing the service (room and board and/or entertainm

A rational consumer spends income on two goods :bread and milk.when the consumer spends the last unit of income on bread total utility increases from 120 to 140 Utils.when the consumer spends the last unit of income of milk,total utility of milk increases from 50 to 60 utils.given the price of bread pb=4 dollar /unit ,find the price of milk,pm at the equilibrium point.

One evening, you and your friends are at the retail shop and having a great coffee. While sitting and talking, you noticed that there is homework that need to be done and submit by the end of the day.


How can you relate this scenario with economics way of thinking?