Macroeconomics Answers

Muchu's old corolla emits a lot of carbon such that it contaminates the entire compound. This carbon emission state is closely related to two (2) depravities that you once learnt in class. You are mandated to briefly explain these 2 economic depravities that affect literally most zambias. (Hint:cause, effect and cure)

Discuss the three methods of measuring National Income?

A hypothetical closed economy has a national income model of the form y=C+I+G where C=30+0.8Y and I and G and private Investment expenditure are exogenously determined to= 50 and 80 units respectively. Compute the national equilibrium level of income for this economy using aggregate income equal aggregate expenditure and withdrawals and equal injection methods

limitations using Gross National Product as a measure of economic performance?

1. A hypothetical closed economy has a national income model of the form y = C + I + G where C = 30 + 0.8Y and I and G and private investment and government expenditure are exogenously determined t 50 and 80 units respectively. Compute the national equilibrium level of income for this economy using aggregate income equals aggregate expenditure and withdrawals and equal injection methods.

5. (a) Muchuu’s mortgage was approved by Zambia National Building Society. Muchuu however, decided to purchase a model of a car called Bugatti using the mortgage. On the other hand, Muchuu had initial plans of investing money in some risky online business. He therefore, approached a money lending institution and applied for a loan in the name of exporting goats to Democratic Republic of Congo and his loan was also approved for such a lucrative investment by the lending institution. Discuss the above scenario and make relevant comparisons and distinctions.

(b) Use Qd = 300 – 50P, and Qs = -100 + 150P to calculate, (i) equilibrium price (P*) and quantity (Q*), (ii) point elasticity of demand and supply at P* and Q*, (ii) Consumer and Producer Surplus

3. (a) Dr. Muchuu runs a sole firm in Zambia called Elena Enterprises such that he is the only supplier of infrared thermometers. Kindly state the scientific name given to Dr. Muchuu and briefly describe the features of Elena Enterprises. Graphically differentiate Elena Enterprises from a perfect competitive market.

(b) A certain region licensed only one firm to supply tap water within that region. Graphically illustrate why it is more economical to have a sole water supplier in a particular region.


4. Muchuu’s old corolla emits a lot of carbon such that it contaminates the entire compound. This carbon emission state is closely related to two (2) depravities that you once learnt in class. You are mandated to briefly explain these 2 economic depravities that affect literally most Zambians. (Hint: cause, effect and cure).

1. Bravo is a well-known farmer from southern province of Zambia who interacts with other members of the Zambia Farmers Association (ZFA) to agree on where to supply their farm onions and tomatoes. Each farming season, he gathers his fellow farmers to discuss on the best onion and tomato pricing model. Assess the above scenario and appropriately use the Zambian statute to discuss the above somewhat behavioral economics.


2. Muchuu is a wheat farmer who sells a bushel of wheat to millers for K10.00. The miller turns the wheat into flour and then sells the flour to a baker for K30.00. The baker uses the flour to make bread and sells the bread to a student for K60.00. The student eats the bread. What is the value added by each person? Calculate GDP.
Discuss the three methods of measuring National Income?

Assume the aggregate demand of an economy is rising at 3%, but its productive capacity is only rising at 2%. Discuss the type of inflation this would lead to. Use a diagram to motivate your answer.