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Discuss the economic effects of personal income tax?
The following table describes the production possibilities of two cities in the country of Basebalia:
Wheat per Worker per Hour Corn per Worker per Hour
Boston 6 6
Chicago 2 4
Without trade, what is the price of wheat (in terms of corn) in Boston? What is the price in Chicago?
- Draw a situation market equilibrium for Rio Juice. What happens to it in each of the following scenarios to the quantity and price of Rio Juice? Why?
- The price of Real Juice (a substitute) increases
- Government increases the minimum wages of labour workers
- The taste of majority of consumers shifts away from juice to aerated drinks (coke, pepsi) and this leads to the decrease in no. of producers of Rio juice.
- Government provides subsidies to Local juice producers while, also the income of consumers who treat juice as normal good increase
(a) Briefly describe how governments are involved in creating monopolies. [10] (b) Eskom is a well-known government created monopoly in South Africa. Briefly explain how Eskom as a monopoly has impacted on the South African economy, since 2009.
According to the theory of the labour market the market mechanisms of supply and demand will naturally move towards equilibrium, where unemployment will be at its natural rate. However for more than 25 years South Africa’s unemployment rates have been among the highest in the world. Using your knowledge of the South African labour market as well as the theory of the firm examine why South Africa is faced with such high levels of unemployment.
Discuss the policy and funding issues underlying food assistance programs in the U.S. (2). Should the program be more of a nutrition program or serve as an income maintenance benefit? (3). Should the program limit food choices? If so why and to what extent? (4) What responsibilities, if any, should participants of the program be expected to meet?
Use a numerical example to explain the difference between the rate of change and the level of change between two values.
Indicate whether each of the following statements is True or False. In each case give a brief explanation for your choice. I
1-Countries like Finland and Norway are unlikely to suffer from the scarcity problem as defined in economic theory.
2-A new highway between Port Elizabeth and East London is a good example of a consumer good.
3-In the economic circular flow model, capital formation is a flow that is mainly linked to firms.
4-The quantity of a good demanded can be indicated as Qd = f(Px) ceteris paribus.
How would you differentiate between Law of Returns to a Factor and Law of Returns to Scale? How would you show your understanding about the reasons of the application of these two laws?
Discuss the policy and findings issues underlying food assistance programs in the U.S. Should the program be more of a nutrition program or serve as an income maintenance benefit? Why? Should the program limit food choices? If so, why, and to what extent? What responsibilities, if any, should participants of the program be expected to meet?
