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Acme tobacco is currently selling 5,000 pounds of pipe tobacco per year.Due to competitive pressures, the average price of a pipe declines from $15 to $12. As a result, the demand for Acme pipe tobacco increases to 6,000 pounds per year.
a) What is the cross elasticity of demand for pipes and pipe tobacco?
b) Assuming that the cross elasticity does not change, at what price of pipes would the demand for pipe tobacco be 3,000 pounds per year? Use $ 15 as the initial price of a pipe
Use a well labelled diagrams to show how production Isoquant can be used to explain:
1)Increasing returns to scale
2)Constant returns to scale
3)Decreasing return to scale
What does consumer surplus indicates?
What does a production frontier shows?
b) With proper examples draw a distinction between mathematical and econometric model?
Explain, using a supply and demand graph, how a freeze in a vegetable crop will affect the equilibrium price and quantity.
Acme Tobacco is currently selling 5,000 pounds of pipe tobacco per year. Due to competitive pressures, the average price of a pipe declines from $15 to $12. As a result , the demand for Acme pipe tobacco increases to 6,000 pounds per year.
a) what is the cross elasticity of demand for pipes and pipe tobacco?
b) Assuming that the cross elasticity does not change, at what price of pipes would the demand for pipe tobacco be 3,000 pounds per year? Use $15 as the initial price of a pipe.
A) In 2004, US Congress allocated over USD20 billion to fight illegal drugs. About 60 percent of the funds was directed at reducing supply of drugs through domestic law enforcement and interdiction. Some critics of this approach argue that supply-side approaches to reduce drug actually help drug producers.
a. Demonstrate graphically the effect of supply-side measures on the market for illegal drugs.
Demonstrate the effect of both supply-side (law enforcement and interdiction) and demand-side measures (treatment and prevention on the market for illegal drugs). How do they affect the profitability of producers?
Five final year science students from UNAM started from scratch to mix and filling of sanitisers in batches of 50 containers of 500ml in order to meet the unexpected spike in demand. Each intern is remunerated a rate of N$7.50 per hour of production. It takes 12 hours to manufacture the first batch and a total cumulative time of 27 hours to manufacture the 4th batch.
Required:
4.1Using the learning curve techniques, determine the rate of learning for the given scenario.
4.2Determine the time it take the team to complete the 8th batch.
4.3 The Ministry of Health and Social Services has placed a special order of 150 containers. What would be the incremental direct labor cost for the special order assuming normal production are 8 batches
F. Frans is the workshop supervisor of NBW. She is paid a fixed salary monthly of N$10000. To keep her motivated she is entitled to an annual bonus of N$9000 to her pension fund annually. She works 9 hours per day from Monday to Friday every week. She is also entitled to 28 days paid vacation leave. There are 12 public holidays in the year for which 9 fall on weekends. Assume a 365 days year.
Required:
Using information relating to F. Frans compute Frans s hourly recovery tariff per hour.
