Economics Answers

i.                   Draw the circular flow diagram                                                             

ii.                 List all the injections and withdrawals                                                       

iii.               Explain how withdrawals and injections may impact an economy.                                                                                                                          

.   

Prepare the income statement and balance sheet for the year ending December 31, 20X5 for Company X. The following information is all that is available. Be sure to prepare proper headings and dates on each financial statement.

Owners Equity

$120,000

Land

125,000

Revenue from sales to costumers

750,000

Cash

25,000

Salary expense

235,000

Other revenue

15,000

 Rent expense

115,000

Accounts payable

50,000

Equipment

250,000

Buildings

400,000

Other operating expenses

300,000

Accounts receivable

50,000

Loans payable

125,000

Retained earnings (equity account)

565,000

Other assets

10,000

The marginal revenue of a widget is $14. If the marginal cost is $11 should the additional unit be produced why ?

4. Assume that GDP is $6000, personal disposable income is $5100, the gov’t deficit is $200, consumption is $3800 and the trade deficit is $100.

What is the size of:

a.      Private saving

b.      Investments

c.      Government spending

Suppose you are given the following closed economy model:

C = 200 + 0.78Yd

T = 0.18Y

I = 50

G = 800

i. Calculate the equilibrium level of income and consumption. (5 Marks)

ii. Calculate the government expenditure multiplier and interpret the result. (4 Marks)

iii. Find the fiscal deficit/surplus and interpret the result. (3 Marks)

iv. Suppose government purchases increase to 1000, what is the new equilibrium income and consumption? (4 Marks)

v. What is the new fiscal deficit/surplus after government spending increases to 1000?

The following statement of financial position of Kudu CC as at 31 December 2020 2020 2019. ASSETS Non -current assets 220 000 220 000 Current assets 132 000 77 000 352 000 297 000 CAPITAL AND LIABILITIES Members contribution: 180 000 180 000 Beo 70 000 70 000 Reo 50 000 50 000 Teo 60 000 60 000 Retained Earnings 90 000 65 000 Non -Current Liabilities 45 000 45 000 Current Liabilities 37 000 7 000 352 000 297 000. You are required to: 1) Calculate the new members interest and show the statement of changes in net members investment and members interest in each of the following instances separately. a) Beo decided to sell 1/5 of his current interest to Reo. The interest is valued at $25 000 of which $15 000 has been deposited into the bank account of the CC as a loan from Beo, the balance of the amount has been paid to Beo as his own funds. b) The CC buy back the interest of Teo for $50 000

Amandla Ltd is an electronics manufacturer based in the Vaal Area in the Gauteng province in South Africa. Amandla Ltd has partnered with an international company to export its products and as a result will be expanding its operations and its product portfolio. Based on this expansion, the company’s management has decided to establish a new business function dedicated to procurement. 

Amandla Ltd has requested your Procurement Consultancy to provide a memo to inform them on the following issues so at to inform their decision making:

The procurement process

The role and importance of procurement

Centralisation vs Decentralisation

Outsourcing vs In-sourcing

The role of e-Commerce and 4IR in the procurement

2. Suppose the consumer consume good t&S and get the utility 𝑠 1 4 𝑡 3 4 and the consumer spent his total income birr 300 to purchase good t at price = 10 birr &S at price=20 birr per unit. Then based on the above information answer the following questions. A. Calculate the utility maximizing level of consumption of good t&S? (1 point) B. Calculate marginal utility of t at utility maximizing level of consumption of good t&S level and interpret it? (2 points) C. Calculate MRSst at utility maximizing level of consumption of good t&S level and interpret it? (2 points) D. Show the result in graph? (1 point

Q-1. Explain each of the following statements using supply-and-demand diagrams.

a. “When a cold snap hits Florida, the price of orange juice rises in supermarkets throughout the country.”

b. “When the weather turns warm in New England every summer, the price of hotel rooms in Caribbean resorts plummets.”

c. “When a war breaks out in the Middle East, the price of gasoline rises and the price of a used Cadillac falls.”

Q-2. “An incr.ease in the demand for notebooks raises the quantity of notebooks demanded but not the quantity supplied.” Is this statement true or false? Explain