Economics Answers

based on the international trade effect, how would an increase in the price level in south africa affect the exchange rate and aggregate demand?

Question 1

1-consider a consumer's choice between meat and fish. Use the indifference curves to illustrate the income effect and substitution effect of an increase in the price of fish. (10 marks)

Question 1

1-John scott has R200 per week available to spend on beer and cigarettes. Beer costs R10 per bottle and cigarettes cost R40 per packet. Suppose John buys 8 bottles of beer and 3 packets of cigarettes and that his marginal utility from beer is then 20 utils and that from cigarettes 35 utils . Is he in equilibrium ?if not ,should he buy more beer or more cigarettes? Explain.(5 marks)

Question 1

1-Explain what happens to real wages if the inflation rate is 7% and money wages increase by 5%.

Question 1

1-calculate the market equilibrium if the equation for a market demand curve is Qd=100-0,5P and the equestion for a market supply curve is Qs= -20 +P . (6 marks)

Consider the perfectly competitive Corn industry. It is initially in long run equilibrium at quantity Q0 and price P0.
a) Draw a supply and demand diagram for the Corn market showing this equilibrium.
b) Draw a diagram for a typical firm in its initial long run equilibrium, showing its Marginal Cost, Average Total Cost, and Long Run Average Cost curves. Are any profits being made by this firm?
c) A major use for Corn in Canada and the United States is to produce ethanol for use as a gasoline additive. Suppose that a new technology allows for the production of ethanol from trees, which is MUCH more efficient than producing ethanol from Corn. What happens to your diagram in part (a)? Use your diagram from part (b) to show how the firm reacts to this new situation. Are any profits being made by this firm?
d) Explain how this industry adjusts to its new long run equilibrium using both the diagrams from parts (a) and (b). (You may assume that it is a constant cost industry)

. Suppose that wheat producers throughout the Midwestern United States experience unusually good weather and so produce a larger than normal harvest. Explain using a diagram what effect this harvest will have on Canadian wheat farmers?

Question.

1- What do u think is the main reason for joining and termination of membership by countries in OPEC(ORGANISATION OF THE PETROLEUM EXPORTING COUNTRIES). To answer this question ,reference must be made on the characteristics of oligopoly and its demand curve. (4 marks)

Question.

1- why would a firm increase the quantity of its output even though marginal cost is increasing?(3 marks)

NB:reference your work

Question.

1- explain why certain firms practice price discrimination?(3 marks)