Economics of Enterprise Answers

Erectors Co. owns earth moving equipment that cost After 8 years it will have estimated salvage value of P18,000.00 Compute the depreciation charge for straight line method for first two years and the book value at the end of 5 years.

(A/G, i%, N) (x) = (P/G, i%, N)

The market demand and supply equations for theme park in a city are given by P = 30 – 0.005QD and P = 10 + 0.005QS, where P is the price in dollars and QD is the quantity of theme-park tickets demanded and QS is the quantity of theme park ticket supplied.

Explain the implications of the welfare of consumers, producers and the society when the price of theme park ticket is fixed at $15. Support your answers with a graph of the theme park tickets market.

The Saudi Arabian Oil Refinery developed an oil at an initial cost of $ 50,000,000. What is the depletion charge during the year where it produces half million barrels of oil? Use unit or factor method in computing depletion.

Metalfab Pump and Filter Inc. estimates that the cost of steel bodies for pressure valves will increase by $2 every 3 months. If the cost for the first quarter is expected to be $80, what is the present worth of the costs for a 5-year time period at an interest rate of 1.86% per quarter?

Is it reasonable to expect firms to take actions that are in the public interest but are detrimental to stockholders? Is regulation always necessary and appropriate to induce firms to act in the public interest? Substantiate with real world examples

d. A rise in bus tariffs .

e. A successful advertising of Toyota cars.

: Currently XYZ airline charges 550 dollars for a Dubai-London ticket (economy) on this plane. Suppose 10 economy seats are left unsold when the plane is starting to board the passengers. A standby passenger offers to pay 250 dollars for a seat. Should the airline sell the ticket to this passenger at 250$? Yes or No? Briefly explain your reason.

Suppose it costs XYZ Airline 120,000 dollars to fly its 500 - seater A380 passenger plane from Dubai to London. The flight service does not include drinks/meal. The passengers pay for food and drinks separately on demand.   

(a): What is the average cost of a Dubai – London seat on this plane?

(b): Currently XYZ airline charges 550 dollars for a Dubai-London ticket (economy) on this plane. Suppose 10 economy seats are left unsold when the plane is starting to board the passengers. A standby passenger offers to pay 250 dollars for a seat. Should the airline sell the ticket to this passenger at 250$? Yes or No? Briefly explain your reason.  

When the price of good A is P 40/ pair, the quantity for good B is 500 units. When the price increases by P 10 per unit, the demand for good B increases by 100 units. Compute the cross-price elasticity and determine the type of good.