Economics Answers

A country imports 3 billion barrels of crude oil per year and domestically produces another
3 billion barrels of crude oil per year. The world price of crude oil is $90 per barrel. Assuming linear schedules, economist estimate the price elasticity of domestic supply (Es)
=0.25 and the price elasticity of domestic demand (Ed) to be 0.1 at the current equilibrium. Suppose now there is an imposition of a $30 per barrel import fee on crude oil that would
involve annual administrative costs of $250million. Assume that the world price will not change as a result of the country imposing the import fee, but that the domestic price will
increase by $30 per barrel.
i) Determine the quantity consumed, quantity produced domestically and quantity imported
after the imposition of the import fee.

every person who buys a ticket to an event at the Conseco Fieldhouse pays a tax applied to the purchase price of the ticket. the money raised from the tax is used to help pay for the Field house. this is an example of what principle of taxation?

Construct a production possibility frontier to illustrate Tom’s earnings potential between the two careers if initially he was not working as a carpenter, then he worked one week per month, then two, then three and finally four weeks per month (assuming only four weeks in a month).

Prove that income generated is equal to NDPfc
Raw material and intermediate goods 5000
Depriciation 800
NIT 700
Sales 30000
Wages and salaries 11500
Rent 7000
Interest 2500
Profit 4500
Increase in stock 2000

M Limited has an authorised share capital of R1 500 000 divided into 1 500 000 ordinary shares of R1 each. The issued share capital at 31 March 2017 was R500 000 which was fully paid, and had been issued at par. On 1 April 2017, the directors, in accordance with the company’s Articles, decided to increase the share capital of the company by offering a further 500 000 ordinary shares of R1 each at a price of R1.60 per share, payable as follows:
• On application, including the premium R0.85 per share
• On allotment R0.25 per share
• On first and final call on 3 August 2017 R0.50 per share

REQUIRED:
Write up the ledger accounts necessary to record these transactions in the books of M Limited.

1.5 In the labour market for carpenters, the current market clearing wage rate is R800 per day. With the aid of a diagram, discuss the welfare effects of government intervention in the form of legislation that sets the minimum wage rate for a carpenter at R1000 per day. (20 marks)

Assume that you decide to spend a quarter of your income on clothes. What is (a) your income elasticity of demand; (b) your price elasticity of demand?

Illustrate and explain using diagrams , the difference between long run supply in a constant cost individual firm and industry and increasing cost firm and industry

the norminal demand for money will increase if?

Assume that the multiplier has a value of 3. Now assume
that the government decides to increase aggregate
demand in an attempt to reduce unemployment. It raises
government expenditure by £100 million with no increase
in taxes. Firms, anticipating a rise in their sales, increase
investment by £200 million, of which £50 million consists
of purchases of foreign machinery. By how much will GDP
rise? (Assume that nothing else changes.)