Economics of Enterprise Answers

Azree an accountant, working for a foreign consultant firm and earning RM 78,000 per year is contemplating giving up his job and set up his own tax consultant firm. He estimates that renting an office would cost RM 780 per month, hiring a secretary with salary RM 1,500 per month and purchasing for required supplies would cost him RM 10,000 per annum. He estimated that his total revenues for the year would be RM 120,000.

Explain briefly whether Azree should practice his own tax consultant firm or not.

Azree an accountant, working for a foreign consultant firm and earning RM 78,000 per year is contemplating giving up his job and set up his own tax consultant firm. He estimates that renting an office would cost RM 780 per month, hiring a secretary with salary RM 1,500 per month and purchasing for required supplies would cost him RM 10,000 per annum. He estimated that his total revenues for the year would be RM 120,000. Calculate  explicit cost, implicit cost, accounting profit & economic profit.  

Write 1 goal that you want to achieve. Follow the SMART way of goal-setting.

Consider a model of voluntary incentive mechanism design for protecting endangered species on private land. After a regulator has identified endangered species on private land, she wants private landowners to retire the land from production. The landowners suffer a monetary loss when they retire land for species protection. They would voluntarily participate in the program of species protection if they received monetary compensation from the regulator to offset their loss. The regulator designs a contract to maximize social welfare from species protection subject to the landowner’s participation constraint. Social welfare is the utility of the individual landowner and social benefits from species protection, minus the monetary compensation scaled by the social value of public funds.

  A barber charges $10 for a haircut and he serves 20 people a day. He raises his prices to $12 for a haircut and only 14 people come in to get a haircut. Are haircuts elastic or inelastic?

Mr. Jamal is working as Deputy Director WASA, Ms. Sana as Deputy Director SNGPL, Ms. Hira as Deputy District Planning Officer and Mr. Haseeb as Deputy Director WAPDA in district Rawalpindi. What kind of cooperation and in which order all these officials have to follow for the provision of basic utilities (clean drinking water, paved roads, sui gas etc) to rural communities of district Rawalpindi? Shortly and comprehensively explain it.

If demand function is given as the following:

Qz = 230 -2.75 Pz + 0.5 I + 1.2 Pm + 0.6A

Where Qz is quantity of Good z sold, Pz is price of Good z per unit, I is per capita income, Pm is price of competitor and A is the amount of advertising spent.

Current values:  Pz= RM 55 I= RM 9000    Pm= RM 50    A =RM 12,000.

a)Determine the equation for demand, total revenue and marginal revenue curve.

b)Determine the total revenue maximizing price and quantity.

Azree an accountant, working for a foreign consultant firm and earning RM 78,000 per year is contemplating giving up his job and set up his own tax consultant firm. He estimates that renting an office would cost RM 780 per month, hiring a secretary with salary RM 1,500 per month and purchasing for required supplies would cost him RM 10,000 per annum. He estimated that his total revenues for the year would be RM 120,000. 

b)Calculate the consultant`s following cost/profit for running his own tax consultant firm:

i)         explicit cost.               

ii)        implicit cost.

iii)        accounting profit.

iv)       economic profit.      

c)Explain briefly whether Azree should practice his own tax consultant firm or not.

Question 1

Azree an accountant, working for a foreign consultant firm and earning RM 78,000 per year is contemplating giving up his job and set up his own tax consultant firm. He estimates that renting an office would cost RM 780 per month, hiring a secretary with salary RM 1,500 per month and purchasing for required supplies would cost him RM 10,000 per annum. He estimated that his total revenues for the year would be RM 120,000.

a)Define the explicit cost and implicit cost

A water company in jeddah wants to borrow money for a new production facility. If the company offers to repay the loan 6000$ in year 1 and amounts increasing by 12,000 each year throgh year 6 how much can the company borrow at interest rate of 10% per year ?