Economics Answers

Karen runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1 per poster. She has fixed costs of $500. Her variable costs are $2,000 for the first thousand posters, $1,600 for the second thousand, and then $1,000 for each additional thousand posters.



Instructions: Round your answers to 3 decimal places.



a. What is her AFC per poster (not per thousand!) if she prints 1,000 posters? $
.



What if she prints 2,000 posters? $
.



What if she prints 10,000 posters? $
.



b. What is her ATC per poster if she prints 1,000? $
.



What if she prints 2,000? $
.



What if she prints 10,000? $
.



c. If the market price fell to 95 cents per poster, would there be any output level at which Karen would not shut down production immediately? .

The cost of production in the South African economy accelerated, due to rising prices of electricity and petrol in the country, which led to an increase in the prices pf domestic goods and services related to foreign goods and services. This is likely to lead to a... 1. increase in the net export and aggregate spending in the SA economy. 2. increase in the demand of SA goods by foreign countries. 3. increase in the quantity of goods and services demanded in the SA economy. 4. decrease in the quantity of goods and services demanded in the SA economy.

A. Which of the following best describes the relationship illustrated between 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.
B. Aggregate spending will increase if... 1. real wealth falls. 2. interest rate falls. 3. consumption falls. 4. investment falls.

Suppose the government increases the expenditure . Use the IS - LM model to show the impact of the increase in government expenditure under two assumptions :
i. The government keeps interest rates constant through an accomodating monetary policy.
ii. The money stock remains unchanged.
Use suitable diagram

suppose you make an annual contribution of $5000 to your savings account at the end of each year for five years if your savings account earn 6% interest annualy how much can be withdrawn at the end of five years?

Do you agree with the argument that mixed economy is the best of all the three systems? Discuss

Consider a consumer's choice between meat and fish. Use indifference curves to illustrate the income effect and substitute effect of an increase in the price of fish.

A recent news article$ 649 iPhone 7 estimated to cost Apple $220discussed that an estimated cost of raw materials required to make Apple's 4.7-inch iPhone 7 with a base 32GB storage was approximately $220 U.S. dollars . Apple was Selling the iPhone 7 for $ 649 in the United States (most phone carriers reduced the cost for customers who went on a specified plan ). Can we conclude from the information above that Apple is making an economic profit of about $429 per iPhone 7?

1) Suppose a perfectly competitive labour market has a demand curve of LD = 120 − 2w and a supply curve of LS = 8w, where w is the wage rate is dollars and L is the quantity of labour in person-hours
a) What are the equilibrium values of the wage and employment?
b) Suppose the government imposed a minimum wage of $14 per hour. Now what are the equilibrium values of the wage and employment?

c) Repeat part (a), assuming now that the market is a monopsony.
d) Repeat part (b), assuming now that the market is a monopsony.

e) Does the imposition of the minimum wage decrease employment here under perfect competition? What about under monopsony? Give a brief intuitive explanation for your answer and why it may be different under the two different market structures.