Economics of Enterprise Answers

A sports collector is considering the purchase of either a hockey jersey or a baseball that was struck for a home run. If the collector chooses to purchase the jersey, what is the opportunity cost?

For each of the following statements, draw a diagram that illustrates the likely effect on the market for Toyota cars. Indicate in each case the impact on equilibrium price and equilibrium quantity with full explanation. 

 A successful advertising of Toyota cars.

For each of the following statements, draw a diagram that illustrates the likely effect on the market for Toyota cars. Indicate in each case the impact on equilibrium price and equilibrium quantity with full explanation.

a. A Mechanic Engineer warns that new Toyota cars overheats during long journeys.

b. The price of rubber which is used to produce tyres reduces.

c. A fall in the price of Nissan cars.

d. A rise in bus tariffs .

e. A successful advertising of Toyota cars.

A Mechanic Engineer warns that new Toyota cars overheats during long journeys.

Suppose that a firm produces at an output level where the MPL is 50 units and the wage rate is Rs 25 (w). Suppose further that the MPK is 100 units and the rental price of land is Rs.40 Q1 = Is the firm producing efficiently? Q2 = If the firm is not producing efficiently , how might it do so?

If a firm is producing in the long run using capital and labor inputs, how the least cost combination of the inputs will be determined? Show graphically and mathematically

Assume you are managing a firm that recently entered in the transportation service, which is meter taxi service similar with Ride, Feres and others. If you have to estimate the demand for the transportation service you provide, (6 marks) a. What would be the explanatory variables you include in a regression model? b. Indicate how you may utilize the results of your demand estimation for decisionmaking. c. How do you make your pricing decision? d. What do you think is the market structure for meter taxi transportation in Addis? Give your justifications

Suppose the own price elasticity of demand for good X is 2, its income elasticity is 3, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y

is 6. Determine how much the consumption of this good will change if: (a) The price of good X increased by 5 percent, (b) the price of good Y increase by 10 percent, (c) Advertising decreases by 2 present, (d) income falls by 3 percent