Economics Answers

Omwando PLC had 400,000 9% redeemable preference shares of £1.00 per share in issue, originally issued at a premium of £0.40 per share.

The company now proposes to redeem 100,000 of these shares at £1.60 per share, financed partially by the issue of 80,000 ordinary shares of £1.00 per share at £1.20

Prior to the issue of replacement shares, the share premium account had a credit balance of £121,000.

Required:

Show the amount of premium payable on redemption to be apportioned from

a.      Share premium account and

b.     Distributable profits

c.      Show the amount, if any, to be transferred to Capital Redemption Reserve as the result of the redemption.

d.     Show journal entries necessary to record above transactions. (Total: 20marks)

Explain the 3 stages of production. Hint use graphs

2.a. When the price of café lattes rises from R15 to R20, the quantity demanded decreases from 2000 to 1200 café lattes per day. What is the price elasticity of demand for café lattes (using the arc formula)? (5 marks).

Explain in appropriate detail, the different ways in which law can respond to economic demands and problems.

Illustrate the importance of the distribution of decision making power within an organisation.

A perfect competitive industry faces a demand curve represented by Q = 25,000 – 1000P.

Also suppose that an individual firm belonging to that industry faces a total cost function given by TC (q) = 40q – q2 + 0.01q3 Here q represents quantity of output produced by an individual firm, Q is the total industry output and P is the price. What would be the equilibrium market price? How much does each firm produce in equilibrium? and also find how many firms would be there in the industry in the long run?

The cost of sunflower seeds has increased. Sunflower seeds are an input when sunflowers are produced. Explain verbally how this change will affect the market for sunflowers, You are allowed to use a diagram to explain your answer,

merchandise exports= 82.1, merchandise imports= 128.7, invisibles= 29.9, services= 18.7, transfers= 17.0, income[net]= -5.8, capital accounts= 4.8, errors= -0.3. calculate trade balance

In 2020, Melokuhle earned a salary of R20 000 a month and paid an income tax of R2 800; his salary increased to R25 000 a month, and he now pays an income tax of R3 100. This is an example of a…

regressive tax.

b.

proportional tax.

c.

progressive tax.

d.

general tax

The population in the country C descreases, due to a lower birth rate. At the same time, there is an increase in the cost of fertilizer which is used to grow vegetables. Explain how the market for vegetables will be affected by the changes. Explain how the equilibrium price and equilibrium quantity will be affected by these changes