Economics of Enterprise Answers

Suppose a firm in the short run produces an output, Q by using two inputs: Capital (K) & Labor (L), is the only variable input. Then
A. Calculate average physical product of Labor (APPL)
B. Calculate marginal physical product of Labor MPPL)
C. Assuming w as the fixed wage rate per unit of Labor, Calculate total variable cast (TVC) and show that both average variable Cost (AVC) and marginal cost (Mc) curves are U-shaped.

4. Make an economic argument why the government should assist ‘needy people’.

How do management accountants support strategic decisons?

Maximum Production of Bananas

Maximum Production of Coconuts

Alpha

100 bananas/day

200 coconuts/day

Beta

150 bananas/day

100 coconut


Using this information, what is Alpha’s opportunity cost of producing 1 banana in terms of coconuts?

Suppose there is an investment proposal requiring $16,000 outlay
now (time zero) and returning a constant cash flow of $7,000 per
period before tax savings due to interest payments for the next
three years. The proposal is to have a market debt proportion of
50% (i.e., 0.50). The capital market requires per period rate of
return on equity of 27% and on debt of 9%. The corporate tax rate
is 40%, and interest is deductible for the calculation of income tax.
Calculate the NPV and IRR based on (a) weighted average cost
of capital method, (b) Arditty-Levy method, (c) equity residual
method, and (d) adjusted net present value method.

What does law of increasing costs state

During a drought the prize of maize goes up, when the price of potatoes increases, the price of bread also goes up. Using supply and demand diagrams show the two relationship.

Discuss in full the economic implications of the loan agreement by china to South Africa. Refer to advantages and disadvantages of this event for the economic wellbeing of South Africa (25 marks)