Economics Answers

With regards to coal shortages and municipal debts, what forms of interventions can Eskom put in place inorder to cover up for all the debts and continue operating?

Each firm is producing 150 units of output in which it sells at a price of R20 per unit; out of this amount each firm is paying R4 tax per unit of the output,the government decide to abolish tax . Explain what would happen in the short run of the equilibrium price and industry output;number of firms , illustrate on a diagram for number of the market and number firms

How will the Eskom intervention of covering up for all the debts and coal shortages impact on consumers

Assume the framework of the simple asset market model of the nominal exchange rate (NER) where the equilibrium condition is ensured by limitless arbitrage. You are given the following data for the Home (H) and Foreign (F) interest rates, announced to hold at a horizon of one year, respectively it = 5% and it* = 3%.
a) If you also consider that the corresponding forward rate of the Home currency (HC) with respect to the Foreign currency (FC) is Ft = 1 (using the price or academic quotation, as in the textbook), calculate the equilibrium spot exchange rate St of the HC consistent with Covered Interest Parity (CIP). Explain by how much (in % terms) the HC is expected to depreciate or appreciate.

Assuming fixed exchange rate,explain how a recessionary situation in United State can feed into a recessionary situation in Indian economy.?

Name and define in detail the type of market structure Eskom is operating as?

How will Eskom’s interventions of covering up for all the debts and coal shortages impact on
consumers?

A. How can both the union and firm be better off by bargaining over the wage rate and employment rather than just the wage rate? Explain with the help of the efficient contract model.

B. If we assume that a union’s utility only depend on the wage rate and not the level of employment, what will be the outcome under the efficient contracts model.

Sheen Ltd manufactures garden tools and has decided to expand operations. The new
operations are expected to increase EBIT from the current level of $500 000 to $1 million p.a.
Sheen has a capital structure that utilises bonds, ordinary equity and preference shares. The
$500 000 of issued bonds pay 6% p.a.. Preference shares pay an annual fixed dividend of $70
000. The company has 1 000 000 ordinary shares that are trading at $5.1 per share. The
Australian corporate tax rate is 30%. Most of the shareholders of Sheen live outside Australia
and cannot fully utilise dividend imputation credits. Sheen needs to raise $700 000 to fund the expansion. Assuming the company can issue new shares at the current market price, what is the impact on EPS new shares are issued to fund the centre? If new debt can be raised at a 9% interest rate, what is the impact on EPS of using debt rather than a new equity issue?

Assuming fixed exchange rate,explain how a recessionary situation in United State can feed into a recessionary situation in Indian economy.