Economics Answers

By referring to a minimum of three factors, comprehensively discuss how firms in the service industry can achieve economies of scale. Include in your discussion the potential disadvantages of the mentioned factors.

Barton Industries expects next year's annual dividend, D1, to be $2.30 and it expects dividends to grow at a constant rate g = 4.8%. The firm's current common stock price, P0, is $22.80. If it needs to issue new common stock, the firm will encounter a 5.1% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. What is the flotation cost adjustment that must be added to its cost of retained earnings

By referring to a minimum of three factors,comprehensively discuss how firms in the service industry can achieve economies of scale.

In 2002 the South African government introduced the minimum wage for domestic workers. With effect
from the 1st of January 2019 it has been revised to R15 per hour with the exception of workers working
fewer hours in certain areas.
https://www.parent24.com/Family/Finance_Legal/What-is-the-minimum-wage-for-domestic-workersand-nannies-20150826 Accessed: 24/02/2019
With the aid of a diagram, discuss the welfare effects of such a policy if the wage rate set is above the
market clearing wage rate (assuming this is R12 per hour).

The number of hours you decide to study each week for your biology class is an economic decision.


True

False

You are the curator of a butterfly sanctuary. The sanctuary is running low on funds, so you decide to increase revenue. What options should you consider? Should you raise or lower the price of admissions? Explain your reasoning in terms of demand and elasticity.

a certain university increases its fees, but finds that just as many students enrol as previously. This is an example of

Given that tomatoes has a price elastic demand the total revenue of tomato firms will

Assume that a five percent (5%) increase in the price of a product leads to a ten percent (10%) drop in the quantity demanded for the product. Describe in full what type of good this will be defined as, according to the theory of price elasticity of demand. Motivate your answer.

(a)Explain four factors that cause a shift in the LM curve.
(b) Using a clearly labelled diagram, discuss the effects of a contractionary monetary policy.