Economics Answers

 Explain each of the following statements using supply and demand diagrams.

a. When there is a drought in southern Europe, the price of soft fruit rises in supermarkets throughout Europe.

b. When a report is published linking a product with an increased risk of cancer, the price of the product concerned tends to fall.

c. The United States announces that it intends to impose new sanctions on the Islamic Republic of Iran. The price of petrol in Europe rises and the price of a used Mercedes falls.

Are cigars substitutes or complements for cigarettes?

b. Using a supply and demand diagram, show what happens in the markets for cigars if the tax on cigarettes is increased.

c. If policymakers wanted to reduce total tobacco consumption, what policies could they combine with the cigarette tax?

Suppose the demand for french bread rises what happens to the consumer surplus

1.     The supply curve will shift to the right if

How did systemic risk contributed to the financial crisis of 2008?

For this question, refer to the article from The Economist magazine titled “A coup in Guinea adds fuel to aluminum's red-hot rally”. a) The article identifies a number of factors behind the recent increase in the price of aluminum. Mention these factors and indicate whether they are demand-side or supply-side factors. 2 b) With the aid of a well-labeled diagram, illustrate the effects of the factors identified in part (a) above on the equilibrium price and quantity of aluminum. Pay attention to the statement in the article that “Supply constraints, however, have been more important” when drawing your diagram.  

If a monopolist can sell 100 units at a price of R20 and 110 units at a price of R19 the marginal revenue for each unit between 100 and 110 is

Twatalika acquired a new property (land and buildings) in Kaoma, on 1 January 2018 for K40 million (including K15 million in respect of the land). The asset was revalued on 31 December 2019 to K43 million (including K16.6 million in respect of the land). The building’s element will be depreciated over a 50-year useful life with a residual value of nil. The useful life and residual value did not subsequently need revision. On 31 December 2020, the property was revalued downwards to a fair value of K35 million as a result of the recession (including K14 million in respect of the land). The company makes the annual transfers from revaluation surplus to retained earnings in respect of excess depreciation, as allowed by IAS 16 Property, Plant, and Equipment. Calculate the amounts that must be reported in the profit or loss and other comprehensive income in respect of the building for the years ended 31 December 2019 and 31 December 2020.

Label the four factors of production

Bring out the essential difference in the nature of equilibrium of a firm under perfect competition in the short run and in the long run.