Economics Answers

Assume that you have to determine the optimal amount of workers (L) that need to be hired in a
factory. The Marginal Benefit to the factory is approximately given by the expression:
MB = 100,000 - L.
The Marginal Cost to the firm is approximately given by the expression:
MC = 10,000 + L
2
.
a) Explain in your own words the Marginal Approach. How do you make a decision using this
approach?
b) Why the model has the Marginal Benefit as decreasing?
c) Why the model has the Marginal Cost increasing at an increasing rate?
d) Calculate the optimal of Labour using the Marginal Approach.

e) Make a well labelled diagram that illustrates your solution.
f) What can be some of the limitations of the Marginal Approach? What other solutions or
approaches can you use to determine how many workers you need to hire?

What type of money is toilet paper? Your options are: commodity, commodity-backed or fiat money.
What function of money is toilet paper performing? Your options are: medium of exchange, unit of account or store of value.

Economists belonging to the Chicago School claim that low prices are always evidence
of competition, not predatory pricing. Explain why the assumption of perfect information is
important for their argument.

(a) Assume that declaration and payment of cash dividends are separate journal entries. Record the journal entry for declaration of total dividends for the year. (No date required)

(b) Assume that on Jan 1, 2019, Samsung issues 10 million new ordinary shares to an investor in exchange for land, which appraisers stated the fair market value as KRW 9 billion. Record the journal entry in KRW millions.



Refer to: Samsung 2018 FS images.samsung.com/is/content/samsung/p5/global/ir/docs/2018_con_quarter04_all.pdf

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.

Discuss to which extend a market system is beneficial to Mauritius.[8]

Monopoly equilibrium is always inferior to perfect competition equilibrium from society ‘s point.
Comment on this statement.

The demand is given by P = 20 – 0.1Q, where P is the price and Q is the quantity demanded. The
monopolist’s total cost is C = 120 + 2Q + 0.05Q
. Find
a. profit-maximizing price and quantity. (2)
b. deadweight loss in the monopoly profit-maximizing equilibrium. (2)

when the first stage of law of variable proportions begins to operate the tvc curve

Assume that you have to determine the optimal amount of workers (L) that need to be hired in a
factory. The Marginal Benefit to the factory is approximately given by the expression:
MB = 100,000 - L.
The Marginal Cost to the firm is approximately given by the expression:
MC = 10,000 + L
2
.
a) Explain in your own words the Marginal Approach. How do you make a decision using this
approach?
b) Why the model has the Marginal Benefit as decreasing?
c) Why the model has the Marginal Cost increasing at an increasing rate?
d) Calculate the optimal of Labour using the Marginal Approach.

e) Make a well labelled diagram that illustrates your solution.
f) What can be some of the limitations of the Marginal Approach? What other solutions or
approaches can you use to determine how many workers you need to hire?