Economics Answers

Department of Electrical Engineering, BUKC have purchased MatLab software for Rs. 1,000,000 now an annual payments of Rs. 100,000 per year for 6 years starting 3 years from now for annual upgrades. What is the present worth of the payments if the interest rate is 7% per year?

Q.1 Assume a household’s budget is $10, the price of palm oil is $1 and the price of
cheese is $2:

i. Draw the household’s budget line on the diagram below. If they were to buy only one good or the other, how many total liters of oil could they buy? How many units of cheese?

ii. Indicate the point where the household will consume. How many liters of palm oil? How much of cheese? Label this Point as E.
iii. Assume the government was to tax palm oil consumption by $1, draw the new budget line on the graph.

iv. Redraw the households original budget line on the diagram, and draw a new budget line where the price of palm oil has doubled.
v. Is the household better off or worse off as a result of the tax? How do you explain?

Q.2 Under the demand and supply analysis, let us assume that the price of Hard wood is $50 per unit. Now the government has imposed 5 % tax to the seller which increased the cost of production. Explain the following with the help of diagram.
i. Do the cost of production affects Demand and Supply? (explain with the reference of necessities and
Non-essential goods)
ii. Will there be a shift or movement along the supply curve? (explain with the reference of necessities
and non-essential goods)
iii. In order to maintain the same profit as before imposition of tax, how much price the seller should
increase presuming that the a) demand for the product is perfectly inelastic and
b) demand of the product is perfectly elastic
iv. What are the determinants of demand and supply of any product

How can disagreements over discretionary spending lead to a government shutdown?

An engineering consulting office has output as service hours which has variable
cost cV & fixed cost Cf of $50 per hour &2,100,000 per year respectively. The
charge-out (selling price P) is $90 per hour & the maximum output of this firm
is 250,000 hours per year. For this firm estimate the following:
a) Is it possible to have 250,000hours yearly output?
b) Evaluate the project at full data, 10% reducing in the fixed cost, 10% reducing
in the variable cost, 10% reducing in the cost as all & 10% reducing in the unit
price.
c) At 10% interest & 20years period live estimate the present (current) worth value
of that office.

A care price is $12,000 & its market value after 7-years is $5,000. In addition its
price is ascending by 4% yearly, estimate the following:
a. Depreciation rate in the first five years of its life.
b. Total depreciation in that period also.
c. The inflation rate.

The annual fixed cost of an equipment is $160,000, its generating income is
$1,200 per day & its operating cost per day is $240 for 12-hours per day and
300-days maximum per year. At 10% interest & 10years useful life evaluate this
equipment and find its current value.

Bank will give you after 5-years $1000, 000 with considering 12%-interest. For
this situation evaluate the present, annual, & future values at simple & compound
interest rates.

A demand curve is downwards sloping? Explain with economic reasoning and an appropriate diagram.

Do you thinking promoting your brand and company is ever worth spending a billion dollars a year on?