Economics Answers

Provide a list of the payments that will need to be remitted to external parties at various frequency levels throughout the year as part of payroll system.

“Determinant of demand are the important factor which influences the decision of the
consumers to purchase commodity or a service”
With respect to the above statement discuss any 5 determinants of the individual demand.

d. If Spruce​ Decor's economic profits were typical of furniture makers in​ 2019, what would you expect to happen in this​ industry? Explain.
A.
Exit would occur because economic profits are positive.
B.
Exit would occur because economic profit is less than accounting profit.
C.
Exit would occur because economic costs exceed accounting costs.
D.
Entry would occur because economic profits are positive.

Consider the revenues and costs in 2019 for Spruce Decor​ Inc., an​ Alberta-based furniture company entirely owned by Mr. Harold Buford.
Furniture Sales
​$655 comma 000
Catalogue Sales
​$17 comma 500
Labour Costs
​$335 comma 000
Materials Costs
​$148 comma 000
Advertising Costs
​$28 comma 000
​Debt-Service Costs
​$32 comma 000

a. What would accountants determine Spruce​ Decor's profits to be in​ 2019?
Spruce​ Decor's profits in 2019 equal ​$
nothing.
b. Suppose Mr. Buford has ​$375 comma 000 of capital invested in Spruce Decor. Also suppose that equally risky enterprises earn a 16 percent rate of return on capital. What is the opportunity cost for Mr.​ Buford's ​capital?
The opportunity cost for Mr.​ Buford's capital is ​$???
nothing.
c. What are the economic profits for Spruce Decor in​ 2019?
The economic profits for Spruce Decor in 2019 equal ​$???
nothing.

In recent years, the collage costs in USA moved up. At the same time the wage difference between the high school students and collage graduates went up. How would you expect the expected effect of these trends to be on the number of students in USA who are willing to get collage education?

In 1990’s in Turkey, economy entered into depression. As a result unemployment rate throughout
the country has risen. Most people have lost all their savings, and their income was so low, that they were only barely able to survive. How would you expect these developments to affect the interest rate (or discount rate) in general in Turkey?

Recently government of Turkey is willing to increase the demand for labor in the country. Write a
policy the government can use for this aim. Explain how according to neoclassical labor market
model, this policy will increase the demand. (Or alternatively, explain in which way neoclassical
model fail to capture the effect of the policy you mention.)

Starting with 1970’s according to many economists, rate of exploitation of the workers has
increased. Using the neoclassical definition of exploitation, write how this claim can be tested.

Difference between marginal product and marginal cost?

Understand a firms decision to operate or shut down and develop this understanding to explain how supply is linked to marginal cost at prices above average variable cost?

Understand the factors that will cause supply to increase?

Explain the concept of price elasticity of supply and understand how the degree of elasticity is linked to firms abilities to respond to price increases?

Understand the concept of economies of scale and why it may exist?

Explain the concept of minimum efficient scale and understand the importance of operating at the minimum efficient scale?

Explain, using reference to fixed costs, why budget airlines sell at low prices?

a) Consider the following payoff matrix of player 1 and player 2

Production Launching Game







PLAYER 2







PRODUCT A

PRODUCT B

PRODUCT C



PRODUCT D

3, 6

7,1

10,4

PLAYER 1

PRODUCT E

5,1

8,2

14,7



PRODUCT F

6,0

6,2

8,5



Using iterative elimination of dominated strategies approach, we can find the equilibrium of the game
(6Marks).

b) Given the following production function;
Required:
Calculate the degree of homogeneity of the above function and comment
on the returns to scale.