Economics Answers

Consider the following information to answer questions Government spending = R550 Exports = R330 Autonomous consumption = R280 Autonomous imports = R170 Investment expenditure = R120 Marginal propensity to consume =0,75 Full employment level of income =R5700

What is the marginal propensity to save?
a. 1
b. 1.60
c. 0.25
d. 0.40

Which of the following statements are correct? a. If spending equals to production and income, there is no tendency for production and income to change b. If spending is greater than production and income, the level of production and income will decrease c. If spending is greater than production and income, the level of production and income will increase d.If spending is less than production and income , the level of production and income will decrease e. Spending may be equal to income, but smaller than production 1. b and e 2. a, c and d 3. a, b,c and e 4. a and d

Identify the conduct elements and describe how they are:
1. Influenced by the structure of the market.
2. Influenced the performance of the market.

Consider two agents, student and professor living in the adjacent houses
and two commodities, money and music noise. For student both music noise
and money are goods and he is endowed with $mS. For professor money
is a good though noise is a bad. She is endowed with $mP . Music noise is
measured on a scale from 0 (silence) to 1 (point of deafness). Assume both
agents have well behaved preferences.

(a) Use the Edgeworth box with money on the horizontal axis and noise
on the vertical. Where are all the efficient allocations of noise and
money? Is the initial allocation efficient? Inefficient? Discuss.

(b) Assume that professor is assigned the property of the noise pollution,
thus she can sell ”the rights to noise pollute”. Will there be any noise
pollution? If so, how much of pollution and what will be the price for
this amount of noise pollution? What important economic proposition
just has been verified?

Harambee Ltd makes three main products, using broadly the same production methods and equipment for all the three products. A conventional product costing system is used at present although activity-based costing (ABC) system is being considered. Details of the three products for a typical period are:

Which of the following best describes the relationship illustrated by the aggregate demand (AD) curve?
1. The inverse relationship between price and quantity demanded for any product.
2. The negative relationship between the price level and levels of total production.
3. It shows no relationship between the price level and real GDP demanded.
4. The inverse relationship between the price level and real output demanded.

Domestic workers will no longer be subjected to meagre salaries as the government has adjusted the minimum wage for domestic workers, with effect from December last year.

According to the Department of Labour's new rates, domestic workers working in Area A (bigger metropolitan areas) who work more than 27 ordinary hours per week, must be paid a minimum of R13.60per hour.
Workers who work fewer than 27 hours per week, must be paid a minimum of R16.03 per hour.
This will mean that domestic worker who works 45 hours per week will now earn a minimum of R2669.24 a month.
Gardeners, drivers or people who look after children, the aged, sick, frail or disabled in a private household, all qualify as domestic workers,

With the aid of a diagram, discuss the welfare effect of this new legislation if the new minimum wage is (1) below equilibrium wage and (2) above the equilibrium wage rate with labour hours as your quantity variable.

How do you dertemine planned investment?

Area A(Bigger Metropolitan Areas) workers working more than 27 hours per week earn R13,69 per hour and Area B workers working less than 27 hours per week earn R16.03 per hour.

With the aid of a diagram, discuss the welfare effect of this new legislation if the new minimum wage is (1) below the equilibrium wage and (2) above the equilibrium wage rate with labour hours as your quantity variable

With the aid of a diagram, discus above the equilibrium wage rate with labour hours as your quantity variable