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You are informed that a company produces Sulfuric acid by combining two variable factors, labor (L) and Sulphur (S), with one fixed input, capital stock (K0). The company pays $2 an hour for labor and $1 for Sulphur; the fixed costs associated with its capital stock total $150 a period.
(a) Write out the general form of the Company’s total costs
(b) Suppose the Company’s short-run production function is given by the following
Q = c (L, S, K0) = 2LP
Where each unit of Q represents a thousand products.
Determine the minimum total cost at which the company could produce 100,000 products.
(c) To achieve minimum cost, what quantities of labor and plastic would the company have to use?
- Explain the difference between "civil rights" and human rights. 2, What effect do you believe the distinction makes with respect to policy decisions?
1. For a monopolist firm the demand and the total cost functions are given as Q = 20- 0.5P and TC= 4Q2-8Q+15, respectively. (8 marks)
Find
a) the optimum quantity and the optimum price level
b) the profit/loss on these levels
c) at what price should the monopolist shut down?
d) Show the economic profit (loss) of the firm in a graphic representation
1. Assume you are managing a food processing plant in Ethiopia. The demand function for one of your product is given as Qd=50-2p. (8 marks)
a) Find the point price elasticity if price is 15 ETB? Is it elastic or inelastic?
b) How do you interpret the elasticity result?
c) In order to get more revenue what will be your recommendation. Is it to increase price or decrease price? Why?
d) Describe at least four determinants of the price elasticity demand for the food product?
1. If Qs = -20 + 10p, and Qd = 400 - 20p, what is the equilibrium price and quantity? (2 marks)
What is the relation between productivity and cost? Describe the association using equations for MC & MP, and AP & AC
- A brief explanation of the public wage bill in SA (Its advisable to illustrate trends by means of graphs and tables showing: -
- Why is it a problem in SA
Brief explanation on the background of public sector wage bill in south Africa
Production at Point A - 0 Tubas & 25 dishwashers
Production at Point B - 30 Tubas & 20 dishwashers
Production at Point C - 50 Tubas & 10 dishwashers
Production at Point D - 60 Tubas & 0 dishwashers
Production at Point E - 40 Tubas & 20 dishwashers
Production at Point F - 30 Tubas & 10 dishwashers
Using the production possibilities frontier above:
a) Calculate the opportunity cost of point A move to point B.
b) Calculate the opportunity cost of point C move to point D.
Production at Point A - 0 Tubas & 25 dishwashers
Production at Point B - 30 Tubas & 20 dishwashers
Production at Point C - 50 Tubas & 10 dishwashers
Production at Point D - 60 Tubas & 0 dishwashers
Production at Point E - 40 Tubas & 20 dishwashers
Production at Point F - 30 Tubas & 10 dishwashers
Using the production possibilities frontier above:
Draw a new graph and explain what would happen to the production possibilities frontier if there were a technological breakthrough in producing tubas.
