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Name and explain the two rules for profit maximisation

Name and explain four different types of elasticity


Bean Ldt is a division of Earl enterprise and has been allocated R5m for capital expansion in the forth-coming year.The management of Bean believes that the company must spread its risk by investing in projects with different risk profiles and has identified two possible investments.The capital to Bean is sufficient to invest in only one of the projects.Economic growth 0%,3%and6%.probability of occurance 0.3,0.4and0.3.Estimated return:project1 14,10and 8 Project2:8,18and22.Existing investment 6,12and16.Book value R5m, R5m and R10m.Market value R5m,R5and R15m.The division manager has requested the accounted to determine which of the two projects should be accepted using the portfolio theory. Required:1.calculate which investment should be selected in line with the portfolio management theory. 2.identify and describe the kind of risk the management of Bean Ltd wishes to spread by investing in different investments and state whether they should be concerned about reducing such risk.
Some categorization of cost drivers provide hierarchical models: 1.unit-level activities;2.batch activities;3.product-sustaining activities ;4.facility - sustaining activities. Other analysis focuses on value adding and non-value adding activities. Requirements:explain what is meant by non-value adding activities and discuss the usefulness of this form of analysis.
Explain the marits and problems of using the return on investments, residual income and economic value added methods.

 Noor Clothing House sells T-shirts. Each shirt costs TZS15 and is sold for TZS20 to 

customers. 

The maximum demand is 20,000 shirts per year and 

The average demand is 18,570 shirts per year

The average lead time is 57 days

the maximum lead time is 64 days.

Required: Compute the reorder level and the maximum, minimum level of stock of T-shirts for 


In order to maximize the Total Revenue, should the bookstore increase the price for fiction books? Explain why.
Explain the marits and problems of using the return on investments, residual income and the economic value added methods
Non-economists often make mistakes when thinking about economic issues. Use a real-life example to illustrate one of the common mistakes made in thinking and reasoning about economic issues. Structure your answer as follows:
 Name (classify) and briefly explain a common mistake being made when
thinking about economic issues (3);
 Briefly describe a real-life situation applicable to the mistake that you
mentioned (2).
Soybeans are produced in a perfectly competitive market. Assume farmers can grow either corn or soybeans on the same land. What happens to the price of soybeans in the next planting season if the price of corn increases
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