Economics Answers

A local garage uses two types of inputs, capital and labour, to service used cars. Their production function is described by Q = 8K^0.8L^0.2, where Q is the number of cars serviced, K is the amount of capital, equipment and tools used in the process and L denotes the input of human labour. The costs of inputs are £16 per unit of labour and £1 per unit of capital. The garage has received an order from a taxi company to service a fleet of 48 cars. Consider a constrained cost minimisation problem and answer the following questions.

a. What is the cost minimising quantity of capital the garage should use?
K* =
b. What is the cost minimising quantity of labour the garage should use?
L* =
c. What is the lowest cost at which 48 cars can be serviced?

14. An inverse demand function for board games is given by p = 240 - q0.5. Monopoly & Co. currently sells board games for £120, but they are thinking about revising their pricing. Help them with that task by answering the following questions
a. What is the quantity demanded when p = £120?
q =
b. What is the price elasticity of demand at the current price?
Ep=

1. Below is the data provide for a particular country:
Price per computer ($) Price per cell phone ($) Quantity of computers (Unit) Quantity of cell phone (Unit)
2005 10 8 200 75
2006 14 10 250 75
2007 16 12 350 125
a) Compute nominal GDP, real GDP and GDP deflator for each year using 2005 as base year.
b) Compute the inflation rate for each year
c) Compute growth of each year.
2. Use the following data to work Problems a and b. The table lists some macroeconomic data for the
United States in 2008.

Suppose you have $425,000 in your savings account at the bank. How much of that will you have if your bank goes bankrupt based off of FDIC insurance?

An investor company has hired you to assess the viability of a project “Education Centre” to be implemented in Sulaimani. The investor’s minimum rate of return is 9% while the rate of inflation in the region is 7.2%. A proposal has been submitted to bank A and B to borrow the capital to construct the building for the education centre. Bank A requests 18% on simple interest rate for 15 years whereas Bank B request 11% compounding monthly for 12 years.

Kesa has changed RS as per unit consumption is one month as per the following condition-

1) unit>=200-> 0.50 paise/unit

2) unit>100 and unit <200->0.60 per/unit

3) unit> 50 and unit<100->0.70 per/unit

4) otherwise 0.8 per/unit

Note- 50 RS meter changes will also add.

Is fiscal deficit always greater than revenue deficit ?
If there are no borrowings then will the fiscal deficit be zero ?
Is fiscal year and financial year both same for the economy ?
If fiscal deficit rises then will the primary deficit also rise ?
Payment of fees to a lawyer engaged by the firm - will it be included in national income ?

Many theorists have developed theories which explain the existence of entrepreneurs. In relation to this, explain Max Weber’s theory and Schumpeter’s theory.

Social enterprise can be classified into three distinct categories. Describe each category, and discuss the efforts of entrepreneurs to become more socially responsible.

The supply price of machine is rs16000, and it has a useful economic life of 2 years, and the prospective yield on this machine in each year is rs 7200, then what is the marginal efficiency of capital?