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The productive capability of an economy is such that to produce 5 units of military
good it takes 2 workers to be employed while 10 units of consumer goods require 3
workers. Resources are limited in such a way that only 75 units of military good can
be produced when all resources are employed.
a) How much workers are in the economy? (1 mark)
b) What is the maximum amount of consumer goods that can be produced? (1
mark)
c) Construct the production possibility schedule and curve for this economy. (6
marks)
d) Graphically represent what would happen if 12 additional workers were added
to the economy. (6 marks)
e) Graphically represent what would happen if the productivity of the workers
were reduced to 2 units of military good and 5 units of consumer goods. (6
marks)
f) Graphically represent what would happen if productivity for military goods
remained the same but it now required 2 workers to produce 10 units of
Given the demand function for commodity x as qx=1500-0.25px2
solve the elasticity of demand for x if p= 20
Demand forecasting is not a speculative exercise into the unknown. It is essentially a reasonable judgement of future probabilities of the market events based on scientific background. Explain the statement by elaborating different qualitative and quantitative methods of demand forecasting.
An individual’s utility function is given by where is the amount of leisure measured in hours per week and is income earned measured in cedis per week.
Determine the value of the marginal utilities, when = 138 and = 500. Hence estimate the change in utility if the individual works for an extra hour, which increases earned income by GH¢15 per week. Does the law of diminishing utility hold for this function?
A firm's demand function for a certain good is given by. Its total cost function is . What output level maximizes the firm's profit?
The supply and demand equations of a good are respectively given by and
The government decides to impose a tax, t, per unit. Find the value of t (in Ghana cedis) which maximizes the governments total tax revenue on the assumption that equilibrium conditions prevail in the market.
The cost of building an office complex, x floors high, in a prime location in Accra is made up of three components:
(a) GH¢10 million for the land
(b) GH¢1/4 million per floor
(c) Specialized costs of GH¢10000x per floor.
How many floors should the office complex contain if the average cost per floor is to be minimized?
The demand and total cost functions of a good are respectively and
a) Find expressions for TR, (profit) , MR, and MC in terms of Q.
b) Solve the equation
and hence determine the value of Q which maximizes profit.
c) Verify that, at the point of maximum profit, MR=MC.
What is the cost of making an item?
The productive capability of an economy is such that to produce 5 units of military good it takes 2 workers to be employed while 10 units of consumer goods require 3 workers. Resources are limited in such a way that only 75 units of military good can be produced when all resources are employed.
a) How much workers are in the economy?
b) What is the maximum amount of consumer goods that can be produced?
