Economics Answers

why would a consumer of 2goods be in equilibrium position if the marginal rate of substitution is equal to ratio of prices of the two goods

Give three reasons for government intervention in the economy

A firm has a total cost function equal to:


TC(q)=20+4q+0.1q^2



And faces a demand curve given by


P(q)= 15-0.3Q


What is the profit maximising production quantity, q, for this firm?

Question Three
a) Giving explain the distinction between capital and revenue expenditure. (4mks)
b) Explain how the imprest system functions and state its advantages. (6mks)
c) State and explain FIVE errors associated with trial balance. How are they corrected? (10mks)

Solow model assumes other things remain the same, certain variables can explain the difference in GDP per capita, investment rates etc. Across the countries:
Choose two countries one rich other poor. From World development Indicator: take the data on the GDP per capita and then take variables given by Solow model and explain the difference in the income per capita between the specific countries you have chosen, which according to you is most responsible for the observed difference.

Explain how rational expectations are the best expectations. Also explain the disadvantages of adaptive expectations.

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

A firm's production function is given by Q= L2e^-0,01L

Find the value of L that maximizes the average product of labour

Consider the current situation of covid 19 and government rejoinder to the situation which has been through plummeting taxes. Using the IS-LM framework show the impact of this policy under the following assumptions.
1.government keeps interest rates constant
2.the money stock remains unchanged