Economics Answers

Calculate Labour force, employment rate, unemployment rate using
Labour force participation rate : 65,8%
working age population: 5 485 000
absorption rate : 48 %
unemployment rate (previous year) : 25%

Three neighbors share a road to their rural cabins. This road requires lots of maintenance and each hour of maintenance costs whoever does the work $120. Family A enjoys using rustic vehicles and doesn’t mind if the road isn’t maintained well but the other two neighbors prefer more comfortable vehicles. Family A’s demand for maintenance is: QdA=50-P/2 (i.e. TBA=100Q-Q2) Family B and C are: QdB=50-(1/5)P (TBB=250Q-5Q2/2) and QdC=50-P/8 (TBC=400Q-4Q2)
a. Suppose Family B was the first to open their cabin this season and performed what it felt was adequate maintenance for itself. Then Family A opens their cabin. Knowing what Family B has already done, would Family A do any further work? How much? Then Family C arrives. Knowing what Company A and B have already done, would Family C do any more work? How much?
B. Given the total amount of work done by all three families, how much net benefit will each company get?

the impact of change in the saving rates on the output

what is the possible effect of the ACFTA on national consumption within south africa

Suppose that a person can borrow and lend at an interest rate of 10 per cent. But there is a 5% rate of inflation and one has to pay an income tax of 30 % on all interest income. If you borrow money, you can deduct interest as an expense. Where current consumption is on the horizontal axis and future consumption is on the vertical axis:



(a) the budget line will have a kink at the point of no saving or lending.

(b) the budget line will be a straight line with a slope of about -1.02.

(c) the budget line will be a straight line with a slope of about -1.05.

(d) the budget line will be a straight line with a slope of about -1.35.

(e) None of the above

Calculate the following for the banana republic given the information provided above
a. What is the consumption function?
b. What is the equation of the AE curve?
c. Calculate equilibrium expenditure
d. Calculate the multiplier.

1. Rob supplies an input to Pete, the value of which depends on Rob’s effort e. Exerting effort costs Rob 1⁄2.e^2, however it generates revenue/return of 20e. What is the surplus-maximising level of effort e?
a. 5
b. 10
c. 20
d. 2
e. None of the above
2. Rob supplies an input to Pete, the value of which depends on Rob’s effort e. Exerting effort costs Rob 1⁄2.e^2, however it generates revenue/return of 20e. After Rob has invested his effort (which is sunk), but before the revenue Pete enters negotiates about how to share this return. Pete is a skillful negotiator, so will capture 3⁄4 of the return. What level of e does Rob invest?
a. 5
b. 10
c. 20
d. 2
e. None of the above

1. A competitive firm faces a price of 136 and a total cost function of TC=7 + q2 + 6q +5
What is this firm's marginal cost function? MC(q)= 14*q+6

Joy cuts lawns in the summer season. Let q be the number of acres mowed per day and L be the number of hours worked per day. Joy never works more than 8 hours per day and during that time his short-run production function is q=0.2L. What is the average product of joy? How many arces can be mowed in one day?

Bubba’s Beers has won the beer concession for Coconut Grove Fair. This means that Bubba can locate one beer stand in the middle of a one mile street, where fair takes place. The stand costs $500 to build and staff. He expects
N = 3000 people per day, each of whom wants to buy one beer, and has a maximum willingness to pay of $3. Assume that, when the thirst hits, consumers are evenly spread out along the street. In addition to the price, consumers also
experience disutility from having to walk to get the beer, at the (round-trip) rate of $2 per mile of distance to the nearest stand. Suppose that Bubba’s marginal costs are constant and equal to $1.5 per beer.
(a) At x miles to the left of the beer staff, the furthest consumer (to the left) to buy beer from Bubba is located. Write
the demand function for Bubba’s beer in terms x. Q(P) = _
(b) Find the price charges for a beer, and, location of consumer x, and profits. How many people
are served on the street? P* = _ πL
* = _ Q* =