Other Economics Answers

The process for the calculation of future values is known as _____________ while the process for the calculation of present values is known as ____________ .

Select one:

a.

discounting; compounding

b.

compounding; depreciating

c.

compounding; discounting

d.

discounting; depreciating

Which one of the following is a purpose of financial budgets?

Select one:

a.

They verify the viability of the strategic plans (operating budgets).

b.

They reveal the financial actions that the business must take to make the execution of its strategic budgets possible.

c.

They indicate how the operating plans of the financial function will affect past financial actions.

d.

They indicate how the operating plans of the business will affect future financial actions.

Kabelo and Hendrik are joint owners of Fitness Gym. They are currently investigating the option of investing in cryotherapy, a cold therapy that may reduce inflammation in tendons or joints. Their investment would provide Fitness Gym members with equipment which may be used to reduce post-exercise recovery times, at an additional cost. The addition of cryotherapy to the gym represents a strategic service for Fitness Gym. Which one of the following statements reflect the importance of capital-investment projects such as the example above?

Select one:

a.

The relative magnitude of the amounts involved.

b.

The short-term nature of capital-investment decisions.

c.

The operational nature of capital-investment projects.

d.

The direct effect of the time value of money on capital-investment projects.

Boya Ltd. produces e-readers to be used in primary schools. An e-reader is sold for R1 500 with a variable cost of R665 and a fixed cost of R960 000. How many e-readers must Boya Ltd. sell in order to break even? (Answer rounded up to the nearest unit).

Select one:

a.

443

b.

1 444

c.

640

d.

1 150

Gunn&Moore manufactures cricket bats at one of its plants. The fixed cost amounts to R1 600 000 per annum. The bats are sold at R400 each and the variable cost per unit amounts to R150. The break-even point of this plant is ____________ units.

Select one:

a.

2 909

b.

2 300

c.

4 000

d.

6 400

Although parking meters in urban centres may yield little revenue because of the costs of installation and the employees who check and maintain them , most cities still regard them as essential for proper traffic flow. Explain why this is so using the concepts of demand, supply and price.

5. Using the example of your favourite soft drink, explain how your demand for it can be derived from the utility you receive from its consumption.

4. A demand curve normally slopes down from left to right. What does this indicate about consumer behaviour with regard to price and quantity demanded ? How does marginal utility help to explain this consumer behaviour and thus, the direction of the demand curve ?

A student newspaper has determined that it’s coefficient of demand is less than one at prices below $1.25 but greater than one at prices above $1.25. Considering the product, why do you think elasticity changes?