Economics Answers

Assume that an economy is initially operating at the natural rate of output (full employment output). Use the AD-AS model to illustrate graphically the effects on price and output of a reduction in government spending. Explain your assumptions with respect to the range of aggregate supply of your analysis

Q=6L^2-0.4L^3 is the function of short run production
Find the value of L that maximumes the out put

James, Keller, and Rivers have the following capital balances; P48,000, P70,000 and P90,000 respectively. Because of a cash shortage James invests an additional P12,000 on June 1st. Each partner withdraws P1,000 per month. James, Keller, and Rivers receive a salary of P13,000, P15,000 and P20,000, respectively, for work done during the year. Each partner receives interest of 8% on their weighted average capital balance without regard to normal drawings. Any remaining profits are split 20%, 30%, and 50% respectively. The net income for the year is P30,000.

Manish buys a second hand car from a car broker for Rs. 3,25,000.The broker receives Rs. 16,500 as commission for his services from manish. How will this transaction affect the national income of the country?

Net national product at factor cost of a particular country in a year is Rs. 1900 crores. There are no interest payments made by the households to the firm/government Or by the firms/government to the household. The personal disposable income of the household is Rs. 1200 crores. The personal income takes paid by them are Rs. 600 crores and the value retained earnings of the firms and government is valued at Rs. 200 crores. What is the value of transfer payments made by the government and firms to the households.

How a fall in the price of crude oil might impact the price of recycled plastics. Use demand and supply diagrams to illustrate and explain your answers.

climate change a major issue in Pacific Island Countries (PICs)? To answer this question, a researcher surveys 1200 randomly selected individuals in PICs. Suppose 800 of the sampled people responded that climate change is a major issue for them.
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a) Construct a 95% confidence interval to estimate the population proportion of individuals in PICs who feel that climate change is a major issue for them. (7 marks)

b) Assume there are 800,000 populations in PICs. What is the minimum number of people in PICs that are concerned about climate change? (5 marks)

Discuss what you would expect to happen to the output of the industry and the level of the profit if perfect competition were replaced by a monopoly?

A monopolist faces two totally separated markets with inverse demand p=100 – qA and
p=160−2qB respectively. The monopolist has no fixed costs and a marginal cost given by mc= 2 /3
q Find the profit maximizing total output and how much of it that is sold on market A and market
B respectively if the monopoly uses third degree price discrimination.
a) What prices will our monopolist charge in the two separate markets? (6 m)
b) Calculate the price elasticity of demand in each market and explain the intuition behind the
relationship between the prices and elasticities in these two separate markets. (4 m

A firm produces cellular telephone service using equipment and labor. When it uses E machine-hours of equipment and hires L person-ours of labor, it can provide up to Q unites of telephone service. The relationship between Q, E, and L is as follows: Q = EL . The firm must always pay PE for each machine-hour of equipment it uses and PL for each person-hour of Labor it hires. Suppose the production manager is told to produce Q=200 units of telephone service and that she wants to choose E and L to minimize costs while achieving that production target.
a) What is the objective function for this problem?