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A monopolist’s demand function is given as Q,=2000-10P where Q is the quantity is produced and sold and P is the price per unit in Ksh. If the firm’s marginal cost is K.sh100:
- Calculate the monopolist’s equilibrium quantity and price.
Which one of the following is most likely to increase the national debt?
A Foreign companies increasing their direct investment into the economy
B The central bank using its reserves of foreign currency to fund a trade deficit
C The government reducing its budget surplus by increasing its expenditure on infrastructure
D The government running a budget deficit, financed by selling bonds to foreign investors
In the basic solo model without exogenous growth, if labour supply doubles then what happens to output per worker??
Firstly, explain how monetary and fiscal policy is implemented and how they can be used to influence GDP and the price level.
Secondly, the quotation above highlights the unprecedented use that has been made of fiscal policy in countries such as the UK during the crisis. Briefly consider whether fiscal policy will remain the key policy instrument in these sorts of countries in the near future.
The Government of Botswana is expected to increase expenditure
by P20 billion for the financial year 2022/23. Using the IS – LM
analysis, explain with the AID of a diagram how this would cause
“crowing out”. How could monetary authorities address this problem
Of crowding out?
Assume that a consumer spends all his income in the purchase of two commodities X and Y whose prices are Ksh.30 and Ksh.20 per unit respectively. The consumer’s monthly income is Ksh.12000. He is satisfied with various combinations of X and Y but prefers to spend his income in equal proportions on the commodities, that is, at a ratio of 1:1 to maintain his level of satisfaction.
Required:
(i) Show the relevant budget line and indifference curves indicating the equilibrium position of the consumer. [5 marks]
(ii) What is the effect of an increase in the consumer’s income from Ksh.12000
to Ksh.24000 per month
(b) Explain practical applications of indifference curve analysis?
(c) Discuss formal similarities between producer and consumer theories.
If consumption is C=100+0.75Yd
Taxes is T=50+0.5Y
Export is X=200
Import is M=50+0.25Y
Government spending is G=150
Investment is I=200. Y is domestic income and Y is private disposable income. Determine the equilibrium level of output/income.
1. Suppose the total monetary value of all final goods and services produced in a particular country in 2008 is $500 billion and the total monetary value of final goods and services sold is $450 billion. We can conclude that:
A. GDP in 2008 is $450 billion.
B. GDP in 2008 is $450 billion.
C. GDP in 2008 is $500 billion.
d. inventories in 2008 fell by $50 billion
Which of the following is not an example of qualitative assessment of the sales force?
A.product knowledge
B.customer orientation
C.attitude
D.number of calls made
Explaining multiplier process in open and closed economy by clearly distinguishing the
autonomous and induced expenditures using hypothetical numbers and graphs.
