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Anna’s demand for peaches is given by PA = 200 – 3QA, where QA is the quantity (kilograms) demanded at price PA ($/kilo). Basil’s demand is given by PB = 120 – 2QB, where QB is the quantity (kilograms) demanded at price PB ($/kilo). Each of the two has $2,000 that they can spend if they want to buy something.
a. Suppose the endowments are as follows: Anna has 110 kilograms of peaches, Basil has none. When they trade, who will sell to whom? How many kilos will be sold? At what price? (1)
b. Suppose the endowments are as follows: Anna has no peaches, Basil has 110 kilos. When they trade, who will sell to whom? How many kilos will be sold? At what price? (1)
c. Suppose the endowments are as follows: Anna has 60 kilograms of peaches, Basil has 50 kilos. When they trade, who will sell to whom? How many kilos will be sold? At what price? (1)
d. Summarize, in your own words, the answers to parts a) through c). (1)
a. Suppose the endowments are as follows: Anna has 110 kilograms of peaches, Basil has none. When they trade, who will sell to whom? How many kilos will be sold? At what price? (1)
b. Suppose the endowments are as follows: Anna has no peaches, Basil has 110 kilos. When they trade, who will sell to whom? How many kilos will be sold? At what price? (1)
c. Suppose the endowments are as follows: Anna has 60 kilograms of peaches, Basil has 50 kilos. When they trade, who will sell to whom? How many kilos will be sold? At what price? (1)
d. Summarize, in your own words, the answers to parts a) through c). (1)
A rational consumer spends all of her income on two goods: Apple and Banana. Suppose the last dollar spent on Apple increased her total utility from 60 utils to 68 utils and the last dollar spent on Banana increased her total utility from 25 utils to 29 utils. If the price of a unit of Apple is 2 Birr, what is the price of a unit of Banana at equilibrium
On 30 September 2019, office desk purchased on 30 April 2017 at a cost price of R5 200 was sold for R4 800 cash. A replacement equipment was purchased at a cost of R43 000 on 1 November 2019. The total depreciation (correctly calculated) for the year on office equipment amounted to R15 200. 2. Land and buildings were acquired on 1 April 2019. 3. On 28 February 2019, the business purchased a new tipper truck at a cost of R101 000. 4. It is the accounting policy of Tera Trader to provide depreciation as follows: Vehicles: According to the straight-line method, at 20% per annum, Office equipment: According to the diminishing-balance method, at 18% per annum, Buildings: According to the straight-line method, at 2% per annum. QUESTION 1 Which one of the following alternatives represents the correct amount of accumulated depreciation on office equipment which was sold on 30 September 2019? 1. R507 2. R1 448 3. R874 4. R1 955
CPI and Inflation
There are three goods in the consumer basket. The fixed quantities are these goods, which the consumer buys, are as follows: Food=60 units, Movies=40 units, and Clothing=90 units. Over a four-year period, the prices of these goods, PF, PM and PC (in dollars) are given below:
Year
Price of Food (PF)
Price of Movies (PM)
Price of Clothing (PC)
1991 15 14 25
1992 16 15 26
1993 17 16 30
1994 20 17 32
Assume that 1992 is the base year.
(i) Calculate the Consumer Price Index for each of the four years
(ii) Calculate the annual inflation rate over the period, starting with 1992, compared to the year before
(iii) If a person were paid 100 000 in 1991, how would she be paid in order to achieve the same level of purchasing power in 1993?
There are three goods in the consumer basket. The fixed quantities are these goods, which the consumer buys, are as follows: Food=60 units, Movies=40 units, and Clothing=90 units. Over a four-year period, the prices of these goods, PF, PM and PC (in dollars) are given below:
Year
Price of Food (PF)
Price of Movies (PM)
Price of Clothing (PC)
1991 15 14 25
1992 16 15 26
1993 17 16 30
1994 20 17 32
Assume that 1992 is the base year.
(i) Calculate the Consumer Price Index for each of the four years
(ii) Calculate the annual inflation rate over the period, starting with 1992, compared to the year before
(iii) If a person were paid 100 000 in 1991, how would she be paid in order to achieve the same level of purchasing power in 1993?
Where did you get the 1.5 in the "marginal utility per dollar for the doughnut is greater than the marginal utility per dollar for the cup of coffee (11>1.5)"? Shouldn't it be 11 > 3.5?
Yissachar and Zevulun decided to form a partnership. Yissachar, a former sole proprietorship had the following accounts: Cash $50,000;
Accounts Receivable $80,000; Allowance for Doubtful Accounts $3,000; Equipment $60,000; Accumulated depreciation – Equipment
$20,000. The partnership agreed that the Allowance for Doubtful Accounts should be valued at $4,000, and the equipment had a fair
market value of $45,000. Zevulun, invested $75,000 cash and a truck that cost him $9,000 when he bought it ten years ago but has a fair
market value of $5,000. Prepare the journal entries necessary to record the formation of the partnership.
Accounts Receivable $80,000; Allowance for Doubtful Accounts $3,000; Equipment $60,000; Accumulated depreciation – Equipment
$20,000. The partnership agreed that the Allowance for Doubtful Accounts should be valued at $4,000, and the equipment had a fair
market value of $45,000. Zevulun, invested $75,000 cash and a truck that cost him $9,000 when he bought it ten years ago but has a fair
market value of $5,000. Prepare the journal entries necessary to record the formation of the partnership.
A rational consumer spends all of her income on two goods: Apple and Banana. Suppose the last dollar spent on Apple increased her total utility from 60 utils to 68 utils and the last dollar spent on Banana increased her total utility from 25 utils to 29 utils. If the price of a unit of Apple is 2 Birr, what is the price of a unit of Banana at equilibrium?
Given utility function U= where PX = 12 Birr, Birr, PY = 4 Birr and the income of the consumer is, M= 240 Birr. A. Find the utility maximizing combinations of X and Y. B. Calculate marginal rate of substitution of X for Y (MRSX,Y) at equilibrium and interpret your result.
Discuss the Managerial utility maximization theory and assess it’s merits with respect to present day business realities.
Which one of the following statements about the demand for money is incorrect?
[1] As the income level increases, the amount of money that individuals hold, decreases.
[2] The quantity of money that people hold is negatively related to the interest rate level.
[3] The income level and the interest rate level affect the quantity of money.
[4] An increase in the interest rate leads to a decrease in the quantity of money created
[1] As the income level increases, the amount of money that individuals hold, decreases.
[2] The quantity of money that people hold is negatively related to the interest rate level.
[3] The income level and the interest rate level affect the quantity of money.
[4] An increase in the interest rate leads to a decrease in the quantity of money created
