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For a monopolist firm the demand and the total cost functions are given as Q = 20-
0.5P and TC= 4Q2-8Q+15, respectively.
If Qs = -20 + 10p, and Qd = 400 - 20p, what is the equilibrium price and quantity?
If a consumer increases her quantity of ice cream consumed by 100% when her
income rises by 25%. Calculate her income elasticity of demand for the ice cream and
interpret the result.
Suppose the income for Themba is R40 per month. Themba decides to use all his income on consuming two goods which are fish and pork. The price of fish is R5 and the price of pork is R8.
a) Clearly illustrate on the graph the combination of the two goods he can afford. Let fish be on the vertical axis and pork on the horizontal axis.
b) Calculate the slope of the budget line.
Question 3
Suppose electricity is a fixed cost and the price and the price of electricity rises.
I. What happens to the average total cost curve (ATC)? and illustrate this effect graphically.
II. Graphically illustrate what happens on the marginal cost curve.
Introduction
- Provide a brief explanation on the background of the public sector wage bill in South Africa
- Why it has become topical
- Define relevant terms, that is public sector wage bill and expenditure control measure
2. Body of the Essay
Public wage bill in SA
- 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
- In the discussion provide indication on what made it to be so large
- How it can be controlled
- Literature review on the public sector wage bill as an expenditure control- Experience of other nations with similar problems
- Discuss how they dealt with the problem
- Critically analyse if the approach can be done in SA
A firm has the following production function:
Q = 9L2/3K1/3
Where Q is output, L is labor and K is Capital.
Where Q is output, L is labor and K is Capital.
(a) What sort of returns to scale characterize this production function?
(b) Derive the marginal product of labor and capital.
(c) What do we mean when we say the production function is linearly homogenous?
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?
