Economics Answers

In the classical model of the labour market, involuntary unemployment will increase if:

workers who work fewer than 27hrs per week must be paid a minimum of R16.03 per hour.
workers that works more than 27hrs per week must paid minimum of R13.69 per hour.
a domestics worker who works 45hrs per week will now earn a min of R2669.24 per month
With the aid of a diagram,discuss the welfare effect of this new legislation ,if the new min wage is
1.below the equilibrium wage
2.above the equilibrium wage rate with labour hours as the quantity variable

You are the manager of a monopoly. A typical consumer's inverse demand function for your firm's product is P = 250- 4Q, and your cost function is TC = 10Q. A. MC is fixed and is equal to $10 (MC=AC=S). MR=250-8Q.

(P=price, Q=quantity of output, TC=total cost, MC=marginal cost, MR=marginal revenue, S=supply)

1)What price the company should choose to get maximum profit if the company will use ordinary pricing strategy?
2)Now suppose the company is thinking about using price discrimination for lower income group of customers. If the company will offer discount of $30 in price to the lower income groups how much additional profit will the company earn? Illustrate graphically.
3)Explain the conditions needed to apply the price discrimination strategy?

RCK Ltd issues a prospectus inviting the public to subscribe for 90 million ordinary shares of $2.00 each. The terms of the issue are that $1.00 is to be paid on application and the remaining $1.00 within one month of allotment.

Applications are received for 108 million shares during July 2018. The directors allot 90 million shares on 15 August 2018. All applicants receive shares on a pro rata basis. The amounts payable on allotment are due by 20 September 2018. By 20 September 2018 the holders of 18 million shares have failed to pay the amounts due on allotment. The directors forfeit the shares on 30 September 2018.

The shares are resold on 15 October 2018 as fully paid. An amount of $2.00 per share is received. The balance of forfeited shares is refunded on 20 October 2018.

Required:
Provide the journal entries necessary to account for the above transactions and events.

Provide some examples of items that would be adjusted directly against equity, rather than being included as part of profit or loss.

What is the golden ratio?

Now assume that for some reason Aggregate Demand shifts to the left
(downwards) and suppose wages fully adjust. By using the AS-AD graph, show the
effects of this shift on the equilibrium output and price level in the Short-Run and in
the Long-run.

Now assume that there is an increase in government expenditure (G), an
increase in the labour force and a reduction in oil prices. By using the AS-AD graph,
explain the effects of these changes on equilibrium output and equilibrium price level
in the Short-Run. Explain each step in your graph.

Now suppose government expenditure (G) increases and there is an increase in
the overall price level (P). By using the IS curve and Fed (Central Bank) Rule curve
graph, explain the effect of these changes on the interest rate and output in the ShortRun. Explain each step in your graph.

Suppose there is an increase in interest rate. By using the Aggregate
Expenditure (AE) – Aggregate Output (Y) graph, show the effects of this change on
AE and Y in the Short-Run. Then, show the effect of increased interest rate by using
the IS curve, explain what will happen to the IS curve.