Economics Answers

Why is it not possible for a perfectly competitive firm to make supernormal profits in the long run?

A. Unemployment can decrease if........

1. There is an economic recession
2. Education system improves
3. Investment spending increase
4. Aggregate demand decrease

Differences in pay can always be explained by the
demand for, and supply of, labour. Do you agree with
this statement? Explain your answer

If injection exceed withdrawals, will GDP go on rising indefinitely, or will new equilibrium be reached?

Suppose that changing climate increases the price of hops (an input in the production of
alcohol). How will this affect the market for alcohol? Assuming that the price floor or tax on
alcohol sales is operating, what does the government need to do in order to maintain an
efficient level of alcohol consumption

Which curve will be affected as a result of bleak economic outlook and below per expected return on investment? IS or LM? Depict the impact using diagram.provide appropriate explaination.

1. If this analysis is correct, namely that a reduction in wages will reduce the aggregate
demand for goods, what assumption must we make about the relative proportions of wages
and profits that are spent (given that a reduction in real wage rates will lead to a
corresponding increase in rates of profit)? Is this a realistic assumption?
2. If government is running a budget deficit, does this necessarily mean that GDP will
increase? Explain.
3. Assume that the central bank announces a rise in interest rates and backs this up with open market operations. What determines the size of the resulting fall in aggregate demand?
4. If the government decide to cut the basic rate of income tax, which will be the
larger effect – the income effect or the substitution effect – for people (a) on low incomes
just above the tax threshold and (b) on very high incomes? What will be the effect on hours
worked in each case (assuming that the person has a choice)?

Why will the multiplier effect of government transfer payments, such as child benefit,
pensions and social security benefits be less than the full multiplier effect from government
expenditure on goods and services?

Explain the differences between non current assets and current assets. (provide appropriate examples)
b) State the THREE (3) data required to compute depreciation

d) Explain FOUR (4) causes of depreciation for non current assets. (provide relevant examples).

Petrol and diesel prices have collapsed amid the coronavirus outbreak. According to figures released by Bloomberg, the cost of a barrel of fuel has fallen dramatically in the past months. A barrel of Brent Crude oil has now fallen from slightly under $65 in mid-January to currently trending in the mid to high $20s. The figure above indicates that oil price is at USD33.15 per barrel as of 6th April, 2020, obvious scenario of down trending.

Using the theory of Supply & Demand, analyse the factors that contributed to the downfall of global petrol price and evaluate the impact on socio-economy in your home country, Malaysia.