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A business incurred implicit costs of R500 000 and explicit costs of R5 million in a specific year. If the firm sold 100 000 units of its output at R50 per unit, what is its accounting and economic profit/loss?
An increase in the price of electricity will:
a. increase the demand for kerosene heaters.
b. increase the demand for light bulbs.
c. increase the demand for stereos.
d. increase the demand for TVs.
Assume that the South African economy is experiencing high inflation of above 10%.
Explain, with the use of the AD-AS model, how the Reserve Bank can reduce the inflation to its’ target range
- Which of the following can lead to an increase in the supply for good X?
- a. A decrease in the number of sellers of good X.
- b. An increase in the price of inputs used to make good X.
- c. An increase in consumers' income, assuming good X is normal.
- d. An improvement in technology used in production of good X.
- e. None of the above
There has been a decrease in the quantity of exports from South Africa to the United States of America due to various reasons.
Explain, with the use of a graph, the impact this had on the demand and supply of dollars and the exchange rate in South Africa
i. What is the cost of any input? (5 marks)
ii. With the aid of a clearly labeled diagrams, illustrate the
relationship between the following cost functions; Total Cost
(TC), Total variable Cost (TVC), Total Fixed costs (TFC),
Average Total cost (ATC), Average Variable Cost (AVC),
Average Fixed Costs (AFC) and Marginal Cost (MC). (15 marks)
iii. What is the main difference between fixed and variable costs? (5
marks)
i. A competitive firm making abnormal profits and subnormal profits (10
marks)
ii. A monopolist making normal profits and supernormal profits (10 Marks)
iii. What are the conditions for profit maximization? (5marks)
Qd = 20 – 2P; Qs = -40 + 6P.
.
i. What are the equilibrium conditions (5 marks)
ii. Find the equilibrium price (5 Marks)
iii. Find the equilibrium quantity (5 Marks)
iv. Calculate the own price elasticity of demand
Factors that determine changes in demand.
