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a) An abrupt heat wave smashes the city of Lusaka. Show the effect in the ice cream market in Lusaka.
b) Authorities impose a tax on ice cream to be paid by producers. How does this affect ice cream market?
c) We are told that Kenya and Madagascar are major producers of cotton. Madagascar workers decide to go on strike. Show the effect on the market for Madagascar cotton.
d) Illustrate the effect of the situation described in part c) on the market for Kenya cotton.
e) In the command economy, the authorities impose a price cap on canned Fanta. Show the effect in the canned Fanta market
1) Write short notes on the following theories of consumption.
I) Absolute income hypothesis
II) Relative income hypothesis
III) life cycle hypothesis
IV) permanent income hypothesis
V) Rational expectation and consumption
2. Write short notes on the following theories of investment
I) Net present value approach
II) Marginal productivity of capital
III) Marginal efficiency of capital
IV) Rigid accelerator theory and flexible accelerator theory
V) Tobin's Q-theory
3) Discuss five factors that influence investment.
4) Apart from income what are the other determinants of consumption?
The following data for a hypothetical country in millions of dollars for the year 2020. Depreciation =200, Exports =150, public transfer =200, Gross domestic private investment =300, corporate income tax =100, factor receipts from abroad =400, gevenment expenditure on goods and services =250, interest income =800, compensation of employees =2600, net interest on government debit =50, indirect business taxes =100, factor payments to abroad =200, imports =200, proprietors incom(profits) =700, retained corporate profit =200, personal consumption expenditure =4500, personal taxes =100, social security contribution =50, rental income =600. A. Calculate the gross domestic product of the country I. Using the expenditure approach II. Using the income approach B, Calculate the gross nationalproduct of the country. E, calculate the rate the inflation rate of the economy if the consumers price index for 2019 is 100. F, find personal disposable income.
Depreciation 200
Exports 150
public transfer 200
Gross domestic private investment 300
corporate income tax 100
factor receipts from abroad 400
gevenment expenditure on goods and services 250
interest income 800
compensation of employees 2600
net interest on government debit 50
indirect business taxes 100
factor payments to abroad 200
imports 200
proprietors incom(profits) 700
retained corporate profit 200
personal consumption expenditure 4500
personal taxes 100
social security contribution 50
rental income 600. From the above data find personale disposable income.
List four factors in the macro-environment and explain how each of these external forces can influence Volkswagen in any way.
a) Plot a line representing consumer spending and label it C. Also plot a line representing consumer, investment and net exports spending and label it (C+I+Xn). Draw a 45
1. Assume a closed economy and no government. Also assume consumption C=50 + 0.8Yd and investment I=80
a) derive the equation for saving
b) find the equilibrium output
c) what is the implied multiplier
