Macroeconomics Answers

Answer the following:

a). Discuss briefly the supply schedule and the various factors affecting the supply in the market.

b). Assume the demand being perfectly inelastic and supply suddenly doubles due to innovative technique of Illustrate in a well labelled graph, the changes in the equilibrium price, and quantity, and also is it advisable to do so from supplier point of view.

Assume that the prices of good X, Y and Z are as follows R5,R1 and R4 respectively, and the Judith has an income of R37 to spend. HOW much of each good will judith consume in order to maximise her utility? What will be her total utility and marginal utility of the last rand spent on each good? Show all the calculations

Draw and explain three stages of neoclassical production function

Describe the term Economies Of Size

In a small open market economy operating under floating exchange rate, under the complaints of capital renters claiming rental prices are too high to afford, suppose the government permanently enacted a law at time t ∗ which makes it illegal to ask more than a specific amount for real rental rate of capital. Suppose that this upper bound on real rental rate is ten percent lower than the prevailing real rental rate in the market. What happens to real rental rate, investment, real wage rate, net exports and price level in the short run and in the transition from short run to long run?

Evaluate the South African externalities problem in the energy sector considering the

case study above and propose relevant intervention measures to address these externalities.

According to Black, et al. (2015), X- efficiency alone is not an adequate measure of economic 

efficiency in an economy. 

Do you agree? Please support your choice.

Assume a firm engaging in selling its product and promotional activities in monopolistic

competition face short run demand and cost functions as Q = 20-0.5P and TC= 4Q2

-8Q+15,

respectively. Having this information (5 marks)

a) Determine the optimal level of output and price in the short run.

b) Calculate the economic profit (loss) the firm will obtain (incur).

c) Show the economic profit (loss) of the firm in a graphic representation

how to know whether a market (perfect/ monopoly/ oligopoly/ monopolistic) is allocative efficient/ productive efficient or not?

Is oligopoly competition short run or long run?