Economics Answers

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.
The announcement was made by the Department of Labour Minister Mildred Oliphant and it
coincided with the signing into law of the National Minimum Wage Bill by President Cyril
Ramaphosa.
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 R13,69 per hour.
Workers who work fewer than 27 hours per week, must be paid a minimum of R16,03 per hour.
This will mean that a domestic worker who works 45 hours per week will now earn a minimum of
R2 669,24 a month.

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.

explain why the marginal cost curve above the average variables cost curve is referred to as the firm's short run supply curve? use both verbal and diagram analysis

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.

Consider the closed economy with C = 800, G = 250, S = 100, and the private saving = -50 (notice “-“).

2.a. Answer the total income and the investment.

Total income:

Investment:



2.b. Answer the tax revenue and the public saving. Does the public saving increase or decrease the national saving?

Tax revenue:

Public saving:

Increase or Decrease?

Consider the production function which satisfies the constant returns to scale. When K = 10, L = 5, H = 20, N = 30, and A = 1, the production level was 100. How much was the labor productivity? If K changed to 30, L changed to 15, H changed to 60 and N changed to 90 (and no change in A), how much would be the labor productivity after the change?

Labor productivity:

Labor productivity after the change:

Equilibrium level of income is that at which

Suppose the government decides to pursue an expansionary fiscal policy. Within the AD-AS framework, what will be the impact on the economy?

A company calculates the prices of jobs by adding overheads to the prime cost and then adding 30% to the total costs as a profit mark–up. Job number Y was sold for £1,690 and incurred overheads of £694.

What was the prime cost of the job?

2. a) One day, Barry (assuming one man in the economy), the barber collects Tk. 400 for haircuts. Over this day, his equipment depreciates in value by Tk.50. Of the remaining Tk. 350, Barry sends Tk. 30 to the government in sales taxes, takes home Tk. 220 in wages, and retains Tk. 100 in his business to add new equipment in the future. From the Tk. 220 that barry takes home, he pays Tk. 70 in income taxes. Based on this information compute - Gross domestic product (GDP), Net national Product (NNP), National income (NI), Personal Income (PI), Disposable personal income.

Explain how low production and productivity led to agriculture backwardness in the economy during the british rule?