Economics Answers

the 45-degree line in the simple Keynesian model
(1) indicates that along the line aggregate demand is greater than aggregate supply
(2) is the line of disequilibrium
(3) show all the possible equilibrium points
(4) shows excess supply and excess demand

investment spending is a function of
(1) the interest rate
(2) government spending
(3) exports
(4)imports

an increase in the tax rate in the Keynesian model will
(1) shift the aggregate spending curve upwards in a parallel way
(2) shift the consumption curve upwards in a parallel way
(3) not affect the aggregate spending curve
(4) swivel the aggregate demand curve downwards

Clearly explain the price discrimination a utility provider such as Eskom in South Africa will practice. Discus how this would be different from the type of discrimination that can be applied to flea market

Suppose you decided to study all last week for this exam instead of doing anything fun. What was the opportunity cost of doing so? Why might the opportunity cost (defined in terms of fun lost) be expected to increase?

4. If, in the context of a standard production function, Y = F(K,N), where K represents physical capital and N represents raw labor, we were to interpret the Solow residual (ΔA/A) as “technological progress,” we would be in error. What, besides technological progress, would this residual catch? How could you expand the model to eliminate this problem?

5. Suppose there is an increase in the population growth rate.
a. Show graphically how this affects the growth rate of both output per capita and total output in the short and the long run. Briefly explain your answer (Hint: Use a diagram like Figure 3-5.)
b. Chart the time paths of per capita income and the per capita capital stock following this change. Briefly explain your answer (Hint: Use a diagram like Figure 3-6.)

Does the fact that something is abundant mean it is not scarce in the economic sense? Why or why not?

Discuss and critically evaluate three (3) determinants of price elasticity of demand with reference to the manufacturing and service industry

Calculate nva at fc
Sales =1000
Output used for self cons.by owner =100
Decrease in stock =1500
Purchase of material=500
Electricity charges=30
Depreciation=60
Ecxise duty=20
Income =10