Economics Answers

Did liquidity risk contributed to the financial crisis of 2008?

1)  A firm’s production function is given by the equation, Q = 25 K^0.5L ^0.5 where ‘Q’ represents units of output, ‘K’ units of capital and ‘L’ units of labor.

a)              Does this production function exhibit increasing, decreasing or constant returns to scale?

b)              Determine MRTSLK

c)              Calculate APL and APK when firm utilizes 25 units of capital and 100 units of labor.

d)              The firm utilizes 40 units of labor and 80 units of capital, if the price of labor is $ 50.00, price of capital $ 100.00 and total capital $ 10,000.00.

Is this factor combination optimum? Give reason. 

When government is paying old age pension ,it is intervening in the economy

Tax evasion occurs when

A, B and C are in a partnership sharing profit ratio is 5:3:2. The statement of financial position of the partnership 1 january is as follow: ASESETS Property 190 000 Plant and Equipment 85 000 Current assets 15 000 CAPITAL Capital A 40 000 Capital B 120 000 Capital C 80 000 Current account A 5 000 Current account B (10 000) Current account C 20 000 Replacement reserve 20 000 General reserve 15 000. On 1 january 2019 C decided to retire under the following conditions. 1. The propery has to be re-valued up to 200 000. 2. Goodwill is estimated at 50 000, but should not be recorded in the books of the new partnership. 3. All reserves must be writte back. 4. The new profit sharing ratio for A and B is 1:1. 5. C will receive 10 000 cash and the rest should be converted to a loan. Required: prepare the capital accounts in column format to display the above.

1. Explain the difference between decrease in demand and decrease in quantity demanded, and using any product of your choice, briefly explain three factors that can cause decreases in demand for that product. 

2. Explain the difference between a price ceiling and price floor. Use two popular examples with well-labelled diagrams to explain.

3. Assuming that the market for Frytol cooking oil is currently in equilibrium (Demand equal supply). Briefly explain with aid of well-labeled diagrams how the following events will affect the equilibrium price and quantity of Frytol (in each case, start from a new equilibrium). 

a) Average incomes fall due to COVID-19. 

b) It is discovered that Frytol oil is good for adults.

c) A tax of 1.75% is place on Frytol. 

The commercial banks ability to create money is decreased when

the population in country C decreases, 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 these changes. Clearly indicate how the equilibriam price and equilibriam quantity will be affected by these change. Make use of a combination of diagrams and verbal explanation to explain your answer.

consider the demand curve AD of a good in figure. the distance AB,BC, and CD are equal to x ,y, and z units respectively. in term of x, y, and z, what will be the price elasticity of demand for the good at point A, B, C and D

For each of the following pair of goods, which good would you expect to have more

price elastic demand and why?

a. Textbooks recommended by lecturers or mystery novels.

b. Downloads of tracks by Jay-Z or downloads of hip-hop music in general.

c. Heating oil during the next six months or heating oil during the next five

years.

d. Lemonade and water.