Economics Answers

What is the relationship between the total revenue of a firm and the price elasticity of demand for a price increase along a linear demand curve? Explain the reason for the relationship.

What might be the objective or objectives of each of the following nonprofit institutions?
a. The engineering college at a major state university
b. A police department in a city
c. The emergency room of a hospital
d. A museum

Using map of isoquants and isocosts show the role of relative input prices and relative productivities in the determination of least cost combination

Why is concrete sold in local markets, while cement powder is sold in a national market

The manager of a sporting goods store uses cost-plus pricing to determine the profit-maximizing price of bicycles. The cost of a bicycle to the store is $80. The manager estimates that the price elasticity of demand is –3.0. What is the profit-maximizing price?

2. Cricket World Cup (CWC) is considering a project proposal which requires an initial investment of $72,625 and it is expected to have net cash flows of $15,000 per year for 8 years. The firm cash flows are discounted at a rate of 12 percent.
a. What is the project’s Net Present Value (NPV)? (Rounded to 2 decimal places)
b. What is the project’s discounted payback period? (Rounded to 2 decimal places)

Which is riskier, buying or selling a “put?”

A. For Kabelo, a consumer of bread and sorghum will be in equilibrium
position if the marginal rate of substitution between the two goods is equal
to ratio of prices of the two goods.’’ Do you agree with the given
statement? Justify your answer. (10 marks).

Investor ABC has two stocks: A&B Each stock may increase, decrease or remain unchanged. Consider the experiment of investing in the two stocks and observing change (if any) in value.

1.How many experimental outcomes are possible?
2.How many experimental outcomes result in a decrease in value for both stocks,
3.How many experimental outcomes result in an increase of value for at least one of the stocks?

Show through the use of a diagram for the market (4 marks) and individual firm
(4 marks) the point as which firms stop entering the market. This applies to the
Long run position for the perfectly competitive market. Provide detailed
discussion of the diagrams.