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TC = 5Q1 + 10Q2
where Q1 and Q2 denote the quantities of G1 and G2, respectively. If P1 and P2 denote
the corresponding prices, then the demand equations are
P1 = 50 − Q1 − Q2
P2 = 100 − Q1 − 4Q2
Use Lagrange Multiplier to find the maximum profit if the firm’s total costs are fixed at $100. Estimate the new optimal profit if total costs rise to $101
between different variables by minimizing the sum of the squared resid-
uals. Assumptions have to be made to make sure our regressions are
valid.
Explain the small sample properties of Ordinary Least Squares (OLS)
under the assumptions such that the estimators are unbiased, the vari-
ance of estimators are constant and the estimators can be used to make
statistical inference.
do you agree that the economic interpretation and impact of legislation is the most neglected area? express your views with the law of primogeniture prevailed during feudal age and equal right of succession in capitalist age
Explain the three categories of returns to scale relating to the long-run average cost curve. (15 MARKS)
Discuss the relationship between the three short-run total cost curves. Use a diagram to motivate your answer. (15 MARKS)
Discuss one (1) reason for the downward sloping aggregate demand curve
Suppose the cost function is given as C = 135 + 75Q – 15Q2 + Q3. Prepare a cost schedule (table) showing the TFC, TVC, TC, AFC, AVC, MC, and ATC. Is this cost function a short run or a long run cost function? Why? Draw the cost curves on the basis of cost data obtained from the cost function.
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)
