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If TC = 0.5q3 − 3q2 + 25q + 20 derive functions for: (a) MC, (b) AC, (c) the slope of AC.
A binomial logit model is estimated to determine the ownership of a Bank Debit card in a
selected Suburb in South Africa. The Bank Debit card is a binary variable with Y=1 for debit
card holder and zero otherwise. The number of households is 60. The estimated binomial logit
model is given by 𝐿𝑖
𝐿𝑖 = -0.55574 + 0.0012𝐵𝑖 - 0.1202𝑇𝑖 – 1.352𝑅𝑖 + 1.452𝐸𝑖
z = (−0.7316) (1.97) (−2.567) (-1.98) (2.89)
McFadden R2 = 0.1007,
LR statistics = 7.6073,
Prob(LR statistics) = 0.0155
where 𝐵𝑖= account balance in rands
𝑇𝑖 = frequency of ATM transactions
𝑅𝑖 = 1 if interest is paid on the account balances and zero otherwise.
𝐸𝑖= 1 if employed in formal sector and zero if in the informal sector.
3.1 What are your priori expectations of each determinant on the Bank Debit card?
(2)
3.2 Interpret the estimated coefficient in the model.
.Normal goods
.Complements
.Substitutes
.Inferior goods
Price per book 20 10 25 30 35 40 25 40 45 20 35 40 Number of books sold 60 70 55 50 45 40 54 40 35 65 48 46
Estimate the linear regression of 𝑦 on 𝑥 and test for the presence or otherwise of autocorrelation at 5%.
a, a large proportion of the petrol in south africa consumes is imported
b, households spend a small proportion of their income on ortrol
c, there is no close substitute for petrol
d, petrol is a luxury good
A trader at the Simpa Hall Market sells books. He sells the books at different fixed price (𝑥) in each of the weeks within the semester. He noted the number of books sold (𝑦 ) at each of the fixed price within the semester. The data is shown in the table below.
Price per book 20 10 25 30 35 40 25 40 45 20 35 40 Number of books sold 60 70 55 50 45 40 54 40 35 65 48 46
Estimate the linear regression of 𝑦 on 𝑥 and test for the presence or otherwise of autocorrelation at 5%.
What are the special properties of the Cobb-Douglas production function, and how might the function be used to calculate the sources of growth?
Harrod asked a number of fundamental questions for the understanding of the growth performance of any country, be it developed or underdeveloped, namely: if changes in income induce investment, what must be the rate of growth of income for plans to invest to equal plans to save in order to ensure a moving equilibrium in a growing economy through time? In static Keynesian theory, if growth equilibrium is disturbed, will it be self-correcting or self-aggravating? And will this equilibrium rate be equal to the maximum rate of growth that the economy is able to sustain given the rate of growth of productive capacity? Analyse the various ways in which Harrod considered these questions?
If a 10% increase in income causes a 20% increase in the quantity demanded for a good or service. It can be concluded that
The village of Hum in Croatia has a market for shoes which buyers and sellers get together to determine the price of shoes. The regional price for shoes is above the village price and shoes are a tradable.
1. Using simple diagrams and proper labels show this situation, and the resulting consumer and producer surplus.
2. Show, with proper labeling (all prices and quantities should be clearly marked), on separate graphs below, what happens when transaction costs cause shoes to be a non-tradable.
3. What is the resulting producer surplus, consumer surplus, and deadweight loss ?
4. Name two development projects/policies that could result in eliminating this deadweight loss and briefly why they would eliminate this loss.
