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1) The Cobb-Douglas production function is
y=z1αz2β
, with
α>0
and
β>0
. Show that
MP1=αy/z1
,
MP2=βy/z2
. What is the
MRTS21
? How does it vary with: (a) y; (b)
z2/z1
.
2) Show that the cost function for a firm with the constant returns Cobb-Douglas production function
y=Az1αz21−α
is given by
C(p,y)=yp1αp21−αB
, where B is a function of A and
α
only. Derive the conditional input demands
Three years later, the job market for the Class of 2003 was rather different. U.S. economic growth had slowed to a crawl, and then to a halt. Companies that had stocked up on recent college grads in the tighter labour markets of 1998-2000 found themselves with more than they knew what to do with in 2002 and 2003. They were not eager to hire more. Bonuses and other “perks” disappeared; job offers became scarcer. With the unemployment rate around 6% in May and June of 2003, the job market was far from the worst ever. But it was nothing like the glory days of 2000.
(v) Identify and explain two (2) fiscal policies and two (2) monetary policies that the US government may have used to correct this situation. (6 marks)
(vi) Use a diagram to illustrate the correction measures. (2 marks)
In a certain region, demand for construction equipment is downward-sloping and elastic with respect to price, while supply is upward-sloping and relatively inelastic. If the state government imposes a tax on the sale of construction equipment, which of the following statements would be true about the effect of the tax?
More of the tax burden falls on consumers than on producers
More of the tax burden falls on producers than on consumers
Total consumer and producer surplus will be reduced by an amount equal to the tax revenue generated
None of the above
All of the above
What can be done to combat unemployment?
What is the impact of unemployment in the country economy?
Consider some of the most important ways in which developing countries may differ in their economic, social, and political structures
consider a consumer with income rupees hundred there are two commodities 1 and 2 to choose from if the consumer spends all his income on good one he can buy 5 units of it if he spent all his income on good to he can buy 20 units of it is based on the given information attempt the following
Tim (under 25) earns a fortnightly wage of R3 050. He pays 7.5% of it to a pension fund and 2% to a union.
Assume that there are 26 fortnights in a year.
If Tim earned the same wage for a full tax year, what would his taxable annual earnings be?
Eugene earns a monthly salary of R10 000. He gets a travel allowance of R2000. The employer pays Eugene's medical aid of R500. R400 per month is deducted from his salary for a pension fund. In February he earned commission of R5000. (Eugene is the only member on the medical aid fund. His company contributes R500 while he makes no contribution towards the fund).
Calculate Eugene's Maximum monthly allowable pension fund deduction.
