Search & Filtering
In the country of Tansyland there are 5 states and each state has 20,000 people that reside there. The amount of income varies for each person and each person in Tansyland is taxed based on the total cost of government-funded projects divided by the number of people who live in Tansyland. Three states are located on the coast of the Pacific Ocean and each have one government-funded lighthouse. A lighthouse can add up to $1 million per year to an individual state’s local economy. The yearly marginal benefit to Tansyland of having another lighthouse is shown in the graph below.
Given the information above, taxes in Tansyland are:
A. regressive.
B. based on each resident’s willingness to pay.
C. proportional.
D. progressive.
The price of shoes in Cuba, a closed economy, is more than the world price of shoes. Cuba decides to open itself to world trade and the result will be that Cuba will begin to _______ shoes.
A. import
B. export
C. import and export
D. produce more shoes
For which type of goods will the deadweight loss be smaller as the result of a tax? For those:
A. whose supply and demand curves are more inelastic.
B. whose supply and demand curves are more elastic.
C. that are relatively expensive.
D. that are consumed by a large fraction of the population.
Under a proportional tax system, Karl pays $30,250 on a salary of $275,000. Jan pays $36,300 in taxes which means Jan’s salary is:
A. $325,000.
B. $275,000.
C. $330,000.
D. $350,000.
Bart and Jeremy share an access road to each of their properties. They are thinking of having the access road paved. Bart is willing to pay $2000 for the paving process while Jeremy’s value for this is just $1200. Both people will benefit from the paving no matter who pays. To secure the contract for the paving job, what is the maximum the paving company can charge and still be assured of being hired by one of the property owners?
A. $800
B. $1200
C. $2,000
D. $3,200
Developing economies export sugar cane to Spain. If Spain had a closed economy this would mean the domestic price of goods would be _____ the world price of sugar cane.
A. less than
B. greater than
C. equal to
D. close to
You have been presented with the following data and asked to fit statisti cal demand functions:
PERIOD QUANTITY PRICE INCOME ADVERTISING
1 120 8.00 10 3
2 165 4.00 22 7
3 120 7.00 20 5
4 165 3.00 20 8
5 180 4.00 30 8
6 90 10.00 19 6
7 150 4.00 18 10.2
8 190 1.60 25 9.3
9 160 5.00 30 8
10 200 2.00 35 9.5
a.Linear Relationship
i.Use any multiple regression packages to estimate a linear relationship between the dependent variable and the independent variables.
ii.Is the estimated demand function “good”? Why or why not?
iii.Discuss the economic implications of the various coefficients.
b.Non-linear relationship.
i.Select and estimate any form of non-linear relationship.
ii.Is the estimated demand function “good”? Why or why not? Compare with the linear form above. Elaborate.
Assuming there are two companies selling personal computers,Company Jackfruit Computers and Company Mangoes Computer. They both have an inventory of personal computers that they would like to sell before a new generation of faster, cheaper machines is introduced. The question facing each competitor is whether or not they should widely advertise a “close out” sale on these discontinued items, or instead let excess inventory work itself off over the next few months. The net revenue to each firm in millions of $, is depicted in the payoff matrixbelow:
Mangoes
Jackfruit
Advertise
Don’t advertise
Advertise
M: $5
J: $5
M: $2
J: $20
Don’t advertise
M: $20
J: $2
M: $10
J: $10
a. Determine the dominant strategy for each firm.
b. Would collusion work in this case? Explain.
Jane manages a small bakery that bakes only "make-to order" cakes. Her total cost (TC) and total revenue (TR) functions are as follows:
TC = 50 + 80Q - 10Q2 + Q3
TR = 100Q - 8Q2
The bakery has a capacity of handling 30 units at any one time.
i. Determine the price she should charge if she wants to maximise total revenue.
ii. Compute the price she should charge if she wants to maximise profits.
Determine whether the following production functions exhibit constant, increasing, or decreasing returns to scale. Provide relevant workings to support your answers.
i. Q = 0.25X + 5Y + 30Z
ii. Q = 4L2 + 6LK + 3K2
iii. Q = 2L0.2K0.6
Describe the condition of finding the optimum level of single input and multiple inputs. Illustrate and discuss the concept of finding the optimum level of multiple inputs.
