Microeconomics Answers

-         A brief explanation of the public wage bill in SA

o  (It is advisable to illustrate trends by means of graphs and tables)

-         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? 

Murray Manufacturing Company produces caps. The firm’s production function is given as: Q = 5LK, where Q = quantity of caps, L = labour measured in person hours and K = capital measured in machine hours. Murray’s labour cost, including fringe benefits, is R20 per hour, while the firm uses R80 per hour as an implicit machine rental charge per hour. Murray’s current budget is R64, 000 per month to pay labour and capital.

Using the Lagrangian technique, determine the quantities of labour and capital that will allow the firm to maximize output given their budgeted input expenditure. What is the firm’s output?

Using the Lagrangian technique, demonstrate the duality in production and cost theory.

Consider a short-run production function 𝑦𝑦=𝑓𝑓(𝐿𝐿)= 6𝐿2⁄3 where 𝐿 refers to labour. Let the price of output be expressed by 𝑝 and the price of labour by 𝑤.

Find the factor demand for labour and the amount of output it will produce. Show all calculations.

How many units of labour will the firm hire, if p = R3 and w = R6?

Using your answer in (1.2), how much output will it produce?

If no other costs are incurred, how much total profits will it earn?

Marginal product of labour - question says output is 20 but that number is not listed in the table of output per period. So no corresponding labour per period noted. How do i find mp without this number? First economics course! Sorry!

Cobb Doglas production function is given by y=10(LK)^1/2.find the expression for the total differential.

A brief explanation of the public wage bill in SA(illustrate trends using graphs and tables)

Why is it a problem in South Africa?

What made it so large?

How can it be controlled?

Can the public sector wage bill be an effective expenditure control measure?

How did other countries deal with public sector wage bill as an expenditure control problem? Can their approach to the problem be done in SA?

- Provide a brief explanation on the background of the public sector wage bill in South Africa

Discuss South Africa’s focus on the public sector wage bill as an expenditure control measure

Why is the public sector bill a problem for South Africa and why is large? An example country with a public sector like South Africa and how they dealth with it

. What would be the effect of the decision on property price. Is there a possibility of a property bubble?