Economics Answers

4. Amal Automotive Company experienced the following accounting events during 2019. Received S60,000 cash from the issue of common stock. Performed services for $35,000 cash. Purchase land for $16,000 cash. Borrowed $1,000 cash from the Bank. Paid $24,000 cash for salary expenses. Sold land for $19,000 cash. Paid $20,000 cash on the loan from state bank. Paid $12,800 cash for salary expense. Paid a cash dividend of $15,000 to the stockholders Required: a. Pass general journal entries and post the entries, to T-accounts and determine the ending balance in each account. b. Prepare a statement of cash flows. Assume Amal Automotive had a beginning cash balance of $10,000.

Jeff decides that he would pay as much as R3 000 for a new laptop computer. He buys the
computer and realises consumer surplus of R700. How much did Jeff pay for his
computer?

Exercise 1 A monopolist produces output with a constant marginal cost MC = 2. Suppose there is one group of consumers with the demand function
P1 = 16 − Q1, and another group with the demand function
P2 = 10 − 12Q2.
(a) Calculate the equilibrium prices and quantities under third degree price
discrimination. (b) Calculate the equilibrium price and quantity when price discrimination is
not allowed (uniform pricing policy). (c) Explain whether in this case the government should tolerate price
discrimination.
Suppose now the monopolist cannot discriminate between the two types of consumers and decides to apply a fixed tariff T and to charge a price p per unit sold. Both types of consumers will pay the same membership fee and the same price per unit.
(d) What would be the highest tariff the monopolist can charge if the
government capped the price so that the efficient quantity is sold?

a. Information asymmetry that exists in lending creates what type of risk for banks? Explain.

b. Examine how banks apply the technique of ‘screening and monitoring’ to minimize the credit risk.

a)the inverse demand functions of two towns for a product are given as ( Q1/2)1/4=P and {2-Q2/10}=P}= P find the market demand of these two towns

b)the supply and demand functions for a product are defined as Q =100 and Qd =50 p -1/2+ 10

i)find the equilibrium price and quantity {Q1/2}1/4

ii)sketch a graph to show the results in i)above

iii)Assume the equilibrium price is 80 pesewas (p=0.80)find the PES and PED associated with a small increase in price from current price of 80 pesewas.

iv)What is the incidence of a tax of Ghs 0.6 imposed on the producer?

what is Bond Yields

Suppose that a system of unemployment compensation is established. Each month,
30 new people (not including the 20 that employers have chosen not to employ) continue to become unemployed, but each monthly group of newly unemployed now takes two months to find a job. After this change, what is the frictional unemployment rate?

Assume that a monopsony firm and a perfectly competitive labor market. Contrast the two
with respect to (a) wage rate, (b) employment level, and (c) profit maximization condition.
Since both monopolists and competitive firms follow the MFC = MRC rule in maximizing profits,
how do you account for the different results? Why might the labor supply of a perfectly
competitive firm and those of a monopolist be different? What are the implications of such a
difference? Show your discussions graphically

Explain the output and price level determination behaviors for a monopoly firm both verbally
and graphically. Explain verbally and graphically how the consumer and producer surpluses
change to compare with a market of perfect competition

Explain the employment and wage rate for a monopsony in an unorganized labor market both
verbally and graphically. Explain verbally and graphically how the wage rate and employment
level change when a union is established in this market.