Economics of Enterprise Answers

Suppose that the total utility function of a consumer is given by TU(x,y) = 3x2 y and the prices of X and Y are 1 Birr and 2 Birr per unit, respectively. If the income of the consumer is 600 Birr and if he spends all of his income on the consumption of commodities of X and Y, find the optimum amount of X and Y that the consumer will consume at equilibrium and find MRTSx,y.

Distinguish between income elasticity of demand and cross price elasticity of demand. Include in your answer a provision of their formula.

2.1 Explain the concept “duty of care” and give examples. (5) 2.2 Discuss human dignity [section 10 in the Bill of Rights] in the classroom as this provision recognises the right of people to be treated with respect and dignity. (5) 2.3 In terms of section 7(2) of the Constitution of the Republic of South Africa, everyone including teachers and parents have the duty to respect, protect and fulfil learners’ right to education. Discuss the statement in line with the following: availability, accessibility, acceptability and adaptability (5)

Q=180√LK^0.8

L=5

K=10

1).Construct marginal product of labour and marginal product of capital

2If L=5, K=10 Measure average product of labour and average product of capital

3.return to scale production function

4.if K=5, L=10 calculate marginal rate of products.

5.law of diminishing marginal returns of labour and law of diminishing marginal returns of capital

6.how about the cross partial effect of this production function

2 Which one of the following did Adam Smith identify as an advantage of the division of labour? A Worker absence may stop production B An increase in average costs of production C An increase in output per worker D Workers may be demotivated by repetitive tasks

If the required reserve ratio (RR) for a bank is 0.81

, and banks lend out all excess reserves, what is the money multiplier (MM)? Round to one decimal place.

Trek-Tyres, a manufacturer of rubber tyres for the motor car and heavy goods vehicles (HGV) industries has recorded a large loss of N$260 million in the past year owing to the global recession and Covid -19. As a result they are to close four factories as part of their multi-national downsizing. The closures will result in the loss of 7,000 jobs worldwide and will result in a reduction of operating costs of N$85 million for the company. As a Press Officer for the company, write a news release, in a maximum of 150 words, announcing this information to the media. (You may invent any additional details but they must be relevant to the subject of the question. Pay particular attention to content, style and layout of the news release. 

Using a demand and supply diagram, analyze the effect of introducing an indirect tax on a product on its equilibrium price and its equilibrium quantity.

When the price of a product falls for a normal good, the:

Helen and Tom have identical baskets containing books (B) and compact discs (D). Helen’s MRS_BD = 1.5 and Tom’s MRS_BD = 0.5.

12. What does Helen’s MRS_BD=1.5 mean?

13. Would Helen accept the trade of 2 of Tom’s discs in exchange for 1 of her books?

14. Between Helen and Tom, who has a relatively stronger preference for discs. Explain.

15. Determine whether Helen or Tom would end up with more books than he/she had to begin with, assuming they were allowed to exchange at the rate of 1 book for 1 disc.