Economics of Enterprise Answers

Consider the following IS/LM model for a closed economy

C=400+0.4yd ,I=200+0.3y-2000i, G=360,T=400 ,m/p=4y-100000ims=2600 (10 marks)

i. Derive the IS equation
ii Derive the LM equation
iii. Solve for equilibrium real output
iv. Solve for the equilibrium interest rate
v. Solve for equilibrium value of consumption and investment

Suppose your firm produces chocolates in a perfectly competitive market and is currently earning zero economic profits. Suppose there is an increase in demand for chocolates after researchers discover that chocolate consumption decreases baldness.
Analyze the short and long-run effects of this increased demand on your firm.

Question 1:discuss on the contribution of the following personalities on economic development :
a)J.M. Keyness
b)David Ricardo

Question 2: Given Px=6a , Py=Px/a
a)find the budget constraint equation if Bo=2(Px+Py)
b)Find the value of a if the consumer purchases 10 units of Y and 7 units of X .

Assume that a firm in a perfectly competitive industry has the following total cost schedule:
Outputs: Total costs ($)
10 $110
15 150
20 180
25 225
30 300
35 385
40 480
a. Calculate a marginal cost and an average cost schedule for the firm.
b. If the prevailing market price is $17 per unit, how many units will be produced and sold? What are the profits per unit? What are total profits?
c. Is the industry in long-run equilibrium at this price?

why do the government give political importance to the wealthy?

adams smiths talk about Truck, Barter, and Exchange here are some questions:

What is meant by "Truck,Barter, and Exchange"?

Why are transactions in a market not independent of each other?

Where do prices come from? Why is competition an important part of this process?

A good harvest will generally lower the income of farmers.” Elaborate this proposition using a supply-and-demand diagram?

if equilibrium income and full employment national income are 400 and 600 respectively. what kind of policy should government employ to achieve the full employment income level? and illustrate with use of diagram.

How does the theory of the firm differ from short-term profit maximization? Why is the former superior to the latter?