Economics of Enterprise Answers

Aston Martin ,the car immortalized by the superspy James bond, is the latest entrant into the Indian ultraluxury car market. In 2011 alone, this is the fourth super car to be launched in India after the Rs.4.5 crore worth Maybach in Feb., the Rs.12.5 crore-koenigsegg Agwera in March and the Rs.1.4 crore Maserati in early April. The top – end of the Indian luxury car market is already crowded with more than two dozen models carrying a price tag of over Rs.1 crore. Aston Martin has added nine more to the array of super luxury cars: amoung them One-77 at Rs.20 crore, is the priceiest car to be launched in India. As for the rest of the models priced between Rs.1.4 -2,6 crore, Lalit Choudhury, Managing Director, Performance cars, the dealer of Aston Martin in India said they expect to sell 30 units this year. The company has sold just 55,000 cars in its 97 year history and about 5000 cars Explain consumer behaviour in the case of such high priced cars, by comparing them with other similar products.

an indivdual consumes porduct x and y and spent 500 birr per time period. the prices of the two goods are 60 birr per unit for x and 40 birr per unit for y. the consumers in this case has a utility function expressed as U(x,y)=10xy. A) express the budget equation mathematically

A loan of P5,000 is made for a period of 15 months, at a simple interest rate of 15%, what future amount is due at the end of the loan period?

1) A consumer has a utility function given by

ln U = 5 ln x1 + 3 ln x2

if the budget constraint is given by

10x1 + 14x2 = 124, find

i) the optimal quantities of the two goods that the consumer should purchase in order to maximise utility, subject to the budget constraint.

ii) the value of the consumer’s marginal utility of money at the optimum

iii) the marginal rate of substitution (MRS) of x1 for x2 and determine its direction at the optimal

An increase in demand results in which of the following changes in the commodity’s equilibrium 

price and quantity?

A. Price rises and quantity falls.

B. Price falls and quantity rises.

C. Price and quantity both rise.

D. Price and quantity both fall.

Which one of the following is not related to GDP

A. It measures the current production only.

B. It measures the values of final goods and services produced within the country.

C. It includes gross private domestic investment in capital goods.

D. It takes into account final goods and services only.

MC curve and AC curve are the mirror reflections of

A. AVC and AFC.

B. AVC and TVC.

C. MP and AP.

D. TP and AP.

Explain whether or not you agree with the following statement: “A company has R500 million in a deposit account with a local bank. In terms of economic theory, this represents capital to the firm

us A numerical example to explain the difference between the rate of change and the level of change between two values. 

let f(x) = (6x+3) and g(x)=(-2x+5)

*use chain rule to calculate h'(x) where h(x)=f(g(x)