Economics Answers

b. What happens to the following under each of the two policies (increase; decrease; or uncertain):
i. The U.S. price of agricultural equipment
ii. The quantity of agricultural equipment imported into the U.S.
iii. The quality of imported agricultural equipment

Can a nation fund its investments at a level higher than that currently provided by its
income? Explain

Can a nation fund its investments at a level higher than that currently provided by its income

What will be the shape of the price consumption curve if X and Y are substitute goods. What can you inter about the own and cross price elasticities of demand? Explain using graphs.

Pakistan cement industry has shown very fast progress in last few years and has
become a leading sector of the economy. At the time of inception, there were only
four cement plants in Pakistan which has now grown to over 30 units. Cement
manufacturers have also expanded their production capacity to meet higher demand
because of construction projects and CPEC. Maple Leaf Cement Factory Limited is
a reputable largest manufacturer of cement in Pakistan. The company was set up in
1956. Suppose the quantity demanded and quantity supplied functions of cement
industry in starting week of current month are:
Qd = 5000-6P
Qs= 1500+P
Where ‘P’ is the price in rupees per bag of cement and ‘Qd’ is quantity demanded of
cement in number of bags. ‘Qs’ is quantity supplied of cement in number of bags.
. What will happen to supply of cement, equilibrium price and equilibrium
quantity of cement if government gives subsidy to cement manufacturers?
Graph is not required ?

Maple Leaf Cement Factory Limited is
a reputable largest manufacturer of cement in Pakistan. The company was set up in
1956. Suppose the quantity demanded and quantity supplied functions of cement
industry in starting week of current month are:
Qd = 5000-6P
Qs= 1500+P
Where ‘P’ is the price in rupees per bag of cement and ‘Qd’ is quantity demanded of
cement in number of bags. ‘Qs’ is quantity supplied of cement in number of bags.
Requirements:
a. Calculate the market equilibrium level of price and quantity.
b. Calculate price elasticity of demand using point elasticity method when the
company is in equilibrium and interpret the result.
c. What will happen to supply of cement, equilibrium price and equilibrium
quantity of cement if government gives subsidy to cement manufacturers?

The table below gives contains hypothetical international balance of payment data for Australia.
All figures are in billions. Calculate the missing elements (i) – (vi), with the appropriate sign
(+ or -) and enter the values in the table. (6 marks)
INTERNATIONAL BALANCE OF PAYMENTS
(HYPOTHETICAL DATA)
CURRENT ACCOUNT
(1) Goods exports
+150
(2) Goods imports
-200
(3) Goods balance
(i)
(4) Services exports
+75
(5) Services imports
-60
(6) Goods and services balance
(ii)
(7) Income balance
+12
(8) Current transfers net
-7
(9) Current account balance
(iii)
CAPITAL AND FINANCIAL ACCOUNT
(10) Capital account balance
-10
(11) Financial account balance
+90
(12) Direct Investment
+65
(13) Portfolio Investment
(iv)
(14) Financial Derivatives
0
(15) Other Investment
0
(16) Reserve assets
-5
(17) Capital and financial account balance
(v)
(18) Net errors and omission
(vi)

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Can a nation fund its investments at a level higher than that currently provided by its income? Explain.

Can a nation fund its investments at a level higher than that currently provided by its income