Economics Answers

Suppose that the nominal interest rate and expected inflation both increase by 3%. These equal increases in the nominal interest rate and expected inflation will cause:

Slope of budget line= change in y/ change in x and also Marginal rate of substitution= change in y/ change in x. If the definitions are same of both then what is the difference between the two?

Px=2, Py=3
Units- 1,2,3,4,5,6
MUx/Px- 10,9,8,7,6,5
MUy/Py- 8,7,6,5,4,3
In this data,
1) MUx/Px > MUy/Py
2) MUx/Px = MUy/Py
3) MUx/Px < MUy/Py
By data, all entries are like MUx/Px > MUy/Py I mean 10>8, 9>7, 8>6, 7>5, 6>4, 5>3. Then what about MUx/Px < MUy/Py and MUx/Px = MUy/Py?

Xiaolin is an employee of Carlson Ltd. Throughout the tax year 2016/17, Carlson Ltd
provided Xiaolin with a mobile telephone that cost £200, private medical insurance at a
cost to Carlson Ltd of £3,000 per year and paid for Xiaolin’s son to attend a local public
school. The cost to Carlson Ltd for the school fees was £20,000.
Class 1A National Insurance contributions payable by Carlson Ltd on these employment
benefits during 2016/17 amounted to:
A. £2,760
B. £3,414
C. £0. Class 1A National Insurance contributions would not be payable by Carlson Ltd
D. £3,174

if QSx=20Px calculate (a) the producer,s supply sechedule (b) producer supply curve (c) what things have been kept constant in this equation

Shanahan Ltd is registered for VAT and is partially exempt. During the year the company
incurred input tax of £136,000. Of this, £100,000 was attributable to taxable supplies,
£13,000 was attributable to exempt supplies and £23,000 was unattributable. The total
VAT exclusive value of supplies made by Shanahan Ltd for the year was £975,000.
£100,000 of the £975,000 was in respect of zero rated supplies. £80,000 of the £975,000
was from exempt supplies. How much of Shanahan Ltd’s input tax is recoverable?

Consider the following information:

Bear Market Normal Market Bull Market
Probability 0.3 0.5 0.2
Return on Stock A -10% 0% 40%
Return on Stock B -5% 5% 50%

Calculate and comment upon the expected return and standard deviation of A and B.

Alex sells an ipod for $200 and gets producer surplus of $80.
What is her willingness to sell?
if she sold the ipod for $80, what would her producer surplus have been?
if the price of an ipod were $200, what would her producer surplus have been?

here is the question

Coffee and tea are substitutes. The demand for each depends on its own price as well as the price of its substitiute. Supply and demand curves are given below for each:-

Coffee Demand Qdc = 60-6Pc + 4Pt
Coffee Supply Qsc = 3Pc

Tea demanded Qdt = 20-2Pt + Pc
Tea Supply Qst =2Pt
Where Pc is the price of coffee and Pt is the price of Tea

Find the equilibrium prices and quantities for coffee and tea . Hint Both markets must be simultaneously in equilibrium.

Answers Are Pc =10 Qc =30 PT = 7.5 QT =15 ( but i don't know how they got to those answers ?)

1) If a firm borrows £20 million for one year at an interest rate of 4%, approximately what is
the present value of the interest tax shield? Assume a 20% marginal corporate tax rate.

2) What is the standard deviation of the portfolio that consists of A and B shares?

Firm Expected Return Standard Deviation Percentage of portfolio Correlation
A 20% 40% 60% 0.2
B 10% 20% 40% 0.2