Economics of Enterprise Answers

As a result of pressure from the Southern African Clothing and Textile Workers Union (SACTWU), the South African government has decided to increase the tariff on textiles. Explain who would gain and who would lose as a result of the decision taken by the South African government. (

Differentiate between an exchange rate and the foreign exchange market. (4)
4.2 Explain how changes in exchange rates can influence exports and imports in your country
Discuss ANY FIVE (5) arguments for and against the use of trade barriers by the government of your country

During a recession, cyclical unemployment will ________ and cyclical inflation will ________.
a) decrease; decrease
b) decrease; increase
c) increase; increase
d) increase; decrease

Ahmned wants to buy a motorcycle that costs today $30,000 dollars His monthly net salary is $4000 and his monthly expenses are $3300. The company selling the motorcycle offers loans as presented in table below:
#of monthly payments % Interest p.a. comp, monthly
Alternative 1 $36 5.50%
Alternative 2 $48 6.52%
Alternative 3 $60 6.55%

What is the best economic alternative for Ahmed having into account his income and expenses?

You borrow $1400. To repay the amount, you make 12 equal monthly payments of $122.50 Determine the following:
a) The effective monthly interest rate
b) The nominal annual interest rate
c) The effective annual interest rate

You have $10,000dollars and want to invest them in the best possible option.
• Bank A offers to pay 4.1% compounded quarterly
• Bank B offers to pay 4% interest, compounded monthly
• Bank C offers to pay 4.1% compounded semesterly
Additionally, petrol/ transport costs to deposit and to collect the money are:
• Bank A is online (assume free)
• Bank B is $15 per trip
• Bank C $12 per trip.
If you are planning to leave the money in the bank for three years, what option is the best ?

• Land cost 1 million paid at the beginning of a project,
• Design and construction for total of 3 million paid in an increasing gradient yearly payment of $300,000 = starting in zero ($0) in year one until it reaches the total value.
• Operation starts once the design and construction phase is paid in total : then, operation and maintenance costs start being $900,000 = per year
• With operation , revenues come with a value of $1,000,000 = per year
• After operation starts, every 3 years , special maintenance is required at a cost of $180,000 =
• The plant is expected to operate for at least 21 years i.e. since it starts operations
• The salvage value of the plant has been estimated at $800,000, 000
Using these facts, prepare a cash flow diagram

Consider the infinite period model for efficient investment. The optimal consumption path is CI-C for t-1, 2, 3 as in the previous question. A countrys output Q is 100 units in each period with no shocks. The investment would require an expenditure of 100 units, and that the investment will pay off in future years by increasing the countrys output by 5 units in year 1 and all subsequent years. The country is open: it can export or import the final good, and it can save or borrow money at a world interest rate 5%. (a) Calculate the present value of output (GDP, Q) and consumption (GNE, C) with no invest ment. (b) Calculate the present value of output (GDP,

The value of the price elasticity of demand is always positive. True of false?

If the price of goods is R5 in a market and price buy plan to purchase 4000 units units weekly and seller plan to sell 5000 unit per week then the price will tent to