Macroeconomics Answers

Using a diagram, show the effect of an increase in autonomous expenditure on equilibrium income and expenditure

Which of the following is an example of voluntary unemployment
A. Housewife
B student
C a subsistence farmer
D pensioner
E all of above

John scott has R200 per week available to spend on beer and cigarettes.beer cost R10 per bottle and cigarettes cost R40 per packet .suppose john buys 8 bottles of beer and 3 packets of cigarettes and that his marginal utility from beer is then 20 utils and that from cigarettes 35 utils .is he in equilibrium ?if not,should he buy more beer or more cigarettes ?cigarettes

Analysts have determine d that the price elasticity of 1,4 is aweighted average figure.during peak hours in the morning and evening the price elasticity of demand is 0,8 and during the rest of the day it is 2,6 .how would this information affect pricing strategy?

what is the GDP deflator,and how does it differ from the consumer and producer price indexes?under what circumstances might it be a more useful measure of price than CPI and PPI?

Find the equilibrium of income level and interest rate and the level of C, I, Mt and M2 in equilibrium value: C=81²+0.6Y, I= 120-150i, Ma= 275,Mt= 0.1Y and M2= 240-250i

1. The demand for ice cream cones is P=1600 and Qd is 2
The supply of ice cream cones is P =400 and Qs is 1. The price of a cone is expressed in cents, and the quantities are expressed in cones per day. To find the equilibrium price (P*) and the equilibrium quantity (Q*), substitute Q* for QD and QS and P* for P. (8 marks). (FOR QD, P=a-bQd and for QS, P=c+dQS).

The demand curve for luminous socks is given by:
Q = 50 – 0.5P
And the total cost function for any firm in the industry is:
C = 4Qi'
(i) Assume Stackleberg behavior with firm 1 as the leader and firm 2 as the
follower.
(i) Determine equilibrium outputs (7 marks)
(ii) Price (1 mark)
(iii) Profit levels for the two firms. (2 marks)
(k) Indicate the Cournot, Stackleberg, collusive and competitive outcomes on the
market diagram. (5 marks)
(l) Calculate the change in consumer surplus when the industry moves from
Cournot to Stackleberg equilibrium. What is the value of the deadweight loss
in Stackleberg equilibrium? Show that the combined consumer and producer
surplus in the Stackleberg equilibrium is less than the surplus to consumers
with a competitive solution. (6 marks)
(m) Can leadership in the Stackleberg model of duopoly ever produce
lower profit than the equilibrium profit level of a duopolist in the Cournot
model? Explain. ? (4 marks)

DP Gumby produces sleeveless sweaters. He can separate the demand function into
a domestic component:
QD = 32 – 0.4PD
and a foreign component
QF = 18 – 0.1PF
His total cost function is: C = 50 + 40Q
(a) On three separate diagrams sketch the demand curve in the domestic
market, the demand curve in the foreign market and the total demand curve.

Tom is a full-time lecturer at a private higher education institution and is considering a career in
carpentry. He wishes to pursue a career in carpentry (a childhood dream) which he has studied part-time
and is now prepared to take on clients. In his current position he earns a rate of R1000 per day and if he
were to pursue a career in carpentry he would earn R800 per day. Due to the flexibility of the
employment conditions at the higher education institution he works for, Tom can negotiate the number of
days he works at and will receive a rate of payment based on the number of days worked.
Question 1
1.1 Construct a production possibility frontier to illustrate Tom’s earnings potential between the two
careers if initially he was not working as a carpenter, then he worked one week per month, then two,
then three and finally four weeks per month (assuming only four weeks in a month)