Economics Answers

Suppose you were an advisor to an underdeveloped nation and were asked to establish a market economy. The leader of this nation assures you that he had the authority to force his citizens to produce those items that would best raise their standard of living. What would your advice be?

What condition is required for the LM curve to be vertical

cadbury is a british multinational company which produces not only chocolate bars but also wide range of other snack products. it is planning to increase the price of all products by 10%
i) price elasticity of demand is the most important factor for cadbury to consider when deciding whether to increase prices. Do you agree with this statement? Explain your answer.

1. What are two ways in which modern-day workers might become slaves? Who do you hold ethically accountable for their indentured servitude?
2. How might an employer seek to determine whether the individuals hired through agencies are in indentured servitude?
3. Once someone becomes an indentured worker, why might he or she stay?

1. Assume an economy where spending for each sector is:

Household: C = 800 + 0.95Q

Business: I = 3000

Public: G = 4000, Tr = 7000, Tx = 1000 + 0.3Q

Foreign: X = 1700, Im = 200 + 0.165Q

Solve for a) Autonomous Spending, b) Spending Multiplier, c) Disposable Income, d) Consumption Expenditure, e) Household Savings,

f) Imports, g) Net Exports, h) Government Expenditure, i) Budget Deficit

2.) Continuing with the previous problem, what happens to the values in parts a-i if we increase Government Purchases by 1500?

3.) Continuing with 2, what happens if Investment Spending decreased by 500?

4.) Continuing with 3, what happens if exports also decrease by 500?

Value added tax is an example of which type of taxes?

Suppose a monopoly firm can produce any level of output it wishes at constant marginal (and average) cost of GH¢5 per unit. Assume the monopoly sells its goods in two different markets separated by some distance. The demand curve in the first market is given by Q1 = 55 - P1.

The demand function in the second market is given by Q2 = 70 - 2P2

i. If the monopolist can maintain the separation between the two markets, what level of output should be produced in each market, and what price will prevail in each market? What are total profits in this situation?


ii. Assume that the monopolists follows the two-part tariffs pricing
[ T(q) = a + pq ] policy , what is the maximum entry fee that must be charged?

iii. How much profit will the firm make?

C = 100 + 0.8Yd investment (I) = 200 govt. exp. (G) = 200 export = 1000 import function(M) = 20+0.3Y. Calculate value of multiplier.

The short-run total cost function of a firm that employs labour (L) and fixed capital

is given by c = vKo + wq^1/B × Ko^ -a/B

Where w is the cost of the labour

and v is the cost of capital

(I) Derived the marginal cost of the firm

ii. Assuming that the firm is a price taking one that sells its output at p per unit, derive the short-run supply function of the firm

iii. If there are 200 firms in the industry with similar cost conditions, compute the total market supply.

In which situation might the Federal Reserve buy government securities or lower its discount rate?