Economics Answers

Using the Pareto criterion for social welfare improvements, as well as the strength and weaknesses of the criteria, critically discuss the following scenario. Consider a family of two people who own a goat. The goat has no economic uses (e.g. it does not provide milk for the family and it cannot be sold). Consider this to be the status quo and that the goat can either be kept alive or slaughtered and eaten. Assume that the family members are both meat eaters. Would a decision to slaughter and eat the goat be social welfare enhancing? Would this decision change if one of the family members is a vegetarian who does not eat meat for altruistic reasons while other family member is a meat eater?

A producer of a new range of energy drink introduces their product for R25 per can.after a month of sales they introduce a special of R40 for 2 cans. A month later they sell the product at the original introductory price. They subsequently introduce another special after another month of R45 for 2. After a month of sales they re- introduce the original special of R40 for 2 and this special is kept on going numerous months thereafter. Use the price elasticity theory to show why, Cetris Paribus, the producer settles at the initial special of R40 for 2. In your discussion include a comment on the type of price elasticity observed with the demand for this energy drink at these prices

Discuss the welfare effect of setting a minimum wage of R13/hr above or below equilibrium wage for 20 marks.

What effect will each of the following have on the demand for small automobiles such as the
Mini-Cooper and Smart car? Write down the mechanism and also plot the graphs for each
case if necessary.
a. The price of small automobiles substantially drops.
b. Big automobiles become less fashionable
c. The price of small automobiles rises (with the price of big autos remaining the same).
d. Income increases and small autos are normal good.
e. Consumers anticipate that the price of small autos will not change in the near future.

The price elasticity of demand for chicken is estimated to be 0.45 if the price of chicken increased by 08 percent what will be the expected percentage decreased in the quality of chicken sold

In which situation would QuickBooks' batch invoicing feature be most useful?
A. If your company charges a standard monthly fee for many customers
B. If your company sends various amounts of the same inventory item to different customers
C. If your company sends the same inventory item to different customers
D. If your company charges the same sales tax to many different customers

What is the cost of goods sold?
A. The difference between the wholesale and resale prices
B. The wholesale purchase price
C. The selling price
D. The price of any discounts provided

The Enter Sales Receipts window does NOT affect Accounts Receivable.

True or False

A rational consumer spends income on two goods :bread and milk.when the consumer spends the last unit of income on bread total utility increases from 120 to 140 Utils.when the consumer spends the last unit of income of milk,total utility of milk increases from 50 to 60 utils.given the price of bread pb=4 dollar /unit ,find the price of milk,pm at the equilibrium point.

Distinguish among public goods, private goods, common resources, natural monopoly goods and mixed goods.