Macroeconomics Answers

Question: In the long run, the output level which is obtained when capital (K) and labor (L) are employed at the maximum level for a given level of technology is called the:

Answer Choices Below [1 Correct Answer] -

A. Actual Output

B. Nominal Output

C. Real Output

D. Potential Output

The demand and supply functions for three goods are given as follows:

D_x=100-3P_x+P_y+3P_z

D_y=80 +P_x-2P_y-2P_z

D_z=120+3P_x-P_y-4P_z

S_x=-10+P_x

S_y=-20=3P_y

S_z=-3+2P_z

Q1: Determine the equilibrium prices and quantities of all three goods.

·  The government decides to:

a.  Impose a 25% tax on X

b.  Impose a 5Rs unit Tax on Y

c.  Gives a 10% subsidy on good Z

· Analyze the impact of each of these three policies separately on equilibrium prices and Quantities.

·  Also calculate changes in consumer and producer surpluses and the amount of revenue earned by the government.

Q2: Repeat this exercise when polices (a, b),(b,c) & (a, b,c) are jointly implemented. Which policy choice is best? Why?

Q:3 Provide theoretical justification (using diagrams) of all results obtained.

How increase the economic growth?

Using appropriate economic variables give two examples each of simple theoretical model and dynamic stochastic general equilibrium models

1. What effect does a $1 specific tax have on equilibrium price and quantity, and what is the incidence on consumers, if
2. The demand curve is perfectly inelastic?
3. The demand curve is perfectly elastic? 
4. The supply curve is perfectly inelastic?
5. The supply curve is perfectly elastic?

Use graphs and math to explain your answers. 

MR=2c^0.5Q find the total revenue

In India how much does our federal or provincial/state governments contribute to education programs? List and explain the programs.

A sudden increase in the number of tourists from South Africa to US will lead to

Why would smaller firms be content to let a large firm practice dominant firm price leadership in an industry.

The demand equation for a product is given by:

Where I is income and P is price.

Write an equation for the point price elasticity. For what values of I and P is demand unitary elastic? Explain. (4 Marks)

Write an equation for the point income elasticity. For what values of I and P is the good a necessity? Explain. (4 Marks)

Given the total cost function for Mizoram Enterprises:

Determine the average cost function and the rate of output that will minimize average cost. (3 Marks)

Determine the marginal cost function and rate of output that will minimize marginal cost. (3 Marks)

At what rate of output does average cost equal marginal cost.

1.              Consider the stock of Aviva PLC. The beta of the stock is 1.25. The earnings per share (EPS) in the coming year is 55p. The expected Return on Equity (ROE) is 11%. The expected return on the market portfolio is 9%. The risk-free rate is 5%. The dividend pay-out ratio is 50%. What is the fair price of Aviva stock?