Economics of Enterprise Answers

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You have now read more about the balanced scorecard. It is important to consider and apply this to your place of work and to share your understanding with the rest of your course mates.

• Based on your understanding of the balance scorecard theory, study the example below and match the correct description to the balanced scorecard quadrant.

•  Justify your answer using the Balanced Scorecard theory

EXAMPLE:

A. Finance

B.Edducational Growth

C.Customer relationship

D.Internal process

match with

1. To satisfy our customers,at which process must we excel
2. If we succeed financially, how will we look financially
3. To achieve our vision, how much organizations learn and grow
4. To achieve our vision, how should we look to our customers

What is the definition of economics

The utility function of Jim is given by  u(w, b, e) = w + b – c (e)

c(e) = 1 if e < 10

c(e) = (1/2 × (e − 10)^2) if e ≥ 10. 2 

Michael is Jim’s boss, who is maximising DM’s profits which are given by: 

  π (w, b, e) = R(e) − w − b, where R(e) is the firm′s sales revenues and R(e) = 100e 

Michael cannot observe Jim’s effort (e) directly but observes R(e) and can set the bonus level dependent on sales revenues.

(a). If Michael sets w=100 and b=0, what would be Jim’s effort level (e) and DM’s profits?

Gap between demand and supply

A small company is using the unit-of-production method for determining depreciation costs. The original value of the property is $110,000. It is estimated that the company can produce 11,000 units before the equipment will have a salvage or scrap value of zero; that is, the depreciation cost per unit produced is $10. The equipment produces 200 units during the first year, and the production rate is doubled each year for the first 4 years. The production rate obtained in the fourth year is then held constant until the value of the equipment is paid off. What would have been the annual depreciation cost if the straight-line method based on this same time period had been used?

You win $100 in a basketball pool. You have a choice between spending the money now and putting it away for a year in a bank account that pays 5 percent interest. What is the opportunity cost of spending the $100 now

Ahmed is a football producer who is interested in knowing that at which level of production his profit would be maximized. If following is the production function determine at which quantity the profits would be maximized.

Y=10+10X+10X²

The government has lowered taxes on cattle ranchers the supply of beef will

What would be the implication of the imposition on aggregate demand and real GDP (Use appropriate diagram). 

Discuss the source you would utilise to increase the pool of potential suppliers who be invited to tender