Economics Answers

You
the owner of a small business thinks that something is wrong with their accounting system because the following information has been reported form September 2018.

Net Profit after tax $5400
net cash from operations $2300

can you help the owners understand why this might occur?
your explanation should be refer to relevant accounting principles

Suppose you looking at two goods in a market, good A and good B. The price of A increases from P0 to P1, and as a result, the quantity demanded for good A decreases from Qa0 to Qa1, and the quantity demanded for good B also decreases from Qb0 to Qb1 as a result of an increase in price of good A. Show the scenario of an increase in price of A by drawing the demand graphs for good A and for good B separately. Are the two goods compliments or substitutes?

Fill in the blank: one key benefit of foreign direct investment is that it can fill the __________ gap in a country, helping it break out of the poverty cycle and invest in increased productivity via physical and human capital. However, this process can be disrupted if multinational corporations repatriate a majority of their profits.

An individual has 40,000 in income per year. The person will get sick with probability 0.1. If he does get sick, the medical bills will total 30,000. The following tables shows the utility derived from certain amounts of income:
Income Utility
40,000 200
37,000 195
35,000 190
30,000 170
20,000 140
10,000 100
Calculate the actuarially fair premium.

a. The price of a cup of coffee was $0.29 in 1970 and $0.99 in 1993. The CPI was 38.8 in 1970 and 144.0 in 1993. Calculate the 1993 price of a cup of coffee in 1970 dollars.
b. For Chinese consumers, the income elasticity of demand for fruit juice is 1.1. If the economy enters a recession next year and consumer income declines by 2.5%, what is the expected change in the quantity of fruit juice demanded next year?

4. For a two-good consumption basket, illustrate graphically the substitute and income effects when the price of one good (on x axis) decreases.
a. if the good is inferior good
b. if the good is giffen good

3. Donald derives utility from only two goods, carrots (Qc) and donuts (Qd). (Qc and Qd are the consumption quantity of carrots and donuts). His utility function is as follows: U(Qc,Qd) = (2Qc)(Qd). Donald has an income (I) of $120 and the price of carrots (Pc) and donuts (Pd) are both $1.
a. What is Donald’s budget line?
b. What quantities of Qc and Qd will maximize Donald’s utility?

2. Draw supply and demand curve of the market of wheat in US. And then suppose there is an agricultural technology for producing wheat improves, and at the same time, the price of rice decreases. Illustrate graphically what will happen to the supply, demand curve and the new market equilibrium.
Hint: consider rice as a substitute good of wheat

2. Draw supply and demand curve of the market of wheat in US. And then suppose there is an agricultural technology for producing wheat improves, and at the same time, the price of rice decreases. Illustrate graphically what will happen to the supply, demand curve and the new market equilibrium (25 points)
Hint: consider rice as a substitute good of wheat

An economic analyst employed by Agbesco Ltd observed that, 9.5 units of ‘Kalami’, Agbesco Ltd product was purchased by customers of Agbesco regardless of the price charged for the product. In addition,when Agbesco Ltd increased its price by GH1, quantity demanded of Kalami falls by 80%.

On the other hand,Agbesco Ltd supplied 80 units of Kalami irrespective of the price level. Interestingly, when Agbesco Ltd increased its price by GH1, quantity supplied of Kalami increased by 20%.

Write out an equation for the demand curve and supply curve for the company. Find the equilibrium price and quantity.

Sketch the demand and supply curves using their respective equation.

Calculate the price elasticity of demand and supply and interpret the results.

Calculate the producer, consumer and total surplus