Economics Answers

How does elasticity affect the burden of a tax? Justify your answer using supply and demand diagrams

What determines the amount of output an economy produces? Explain briefly.

Why is economics Central to an understanding of the problems of development?

Which of the following is used to measure a country’s real output per person?
[1] Nominal GDP.
[2] Current GDP per capita.
[3] Real GDP.
[4] Real GDP per capita.

Explain the impact on cash flows of a build-up in inventory during this pandemic and how can companies mitigate the financial impact

anticipated inflation affects: select one: a. borrowers only. b. lenders only. c. all aspects of the economy. d. only business firms involved in investment spending.

“Businesses from all walks of life are haemorrhaging cash as the COVID-19 pandemic sweeps the globe.”

This statement is mentioned in the required reading, explain what the statement above means in terms of its impact on ‘cash flows’ to be generated from operating, investing and financing activities.

5. Using the supply data in the schedule shown below, complete the table by computing the price elasticity of supply coefficients between each set of prices. Indicate whether supply is elastic, inelastic or unitary at each set of prices.

Quantity Elasticity Character
Price supplied coefficient of supply
$11 130 _________ _________
9 110 _________ _________
7 90 _________ _________
5 70 _________ _________
3 50 _________ _________

4. The following is a straight-line demand curve that confronts a single firm.

Quantity
Price demanded (3) (4)
$6 1 _____ _____
5 2 _____ _____
4 3 _____ _____
3 4 _____ _____
2 5 _____ _____
1 6 _____ _____

(a) In column 3, compute total revenue. In column 4, compute the coefficient for the price elasticity of demand at each price using the midpoints formula.
(b) Describe the character of elasticity across the prices based on the total revenue test and the elasticity coefficient.
(c) Does a straight-line demand curve have constant elasticity?
(d) Of what practical significance is your answer to (c)?

3. The following data shows the relationship between price and quantity demanded at four different prices for a product:

P = $11, Qd = 16
P = $9, Qd = 24
P = $7, Qd = 32
P = $5, Qd = 40

Using the midpoints formula, what is the price elasticity of demand between: (a) $11 and $9; (b) $9 and $7; (c) $7 and $5?