Economics Answers

1. Assume that the equations of Demand and Supply of a specific good X in 2018 are as follows: Qd = 20,000 - 500P; Qs = -8,000 + 3000P
Assume that in the 2019 Budget proposal, the Government plans to introduce a tax on the producers of good X. The tax will be equal to one euro per unitof good X produced. Assuming that all other exogenous variables remain constant in 2018 and 2019:

a. Solve for the equilibrium price and quantity for good X in 2018.
b. Solve for the equilibrium price and quantity for good X in 2019.
c. Draw an adequate graph describing both equilibria.
d. What is the change in net revenues (from 2018 to 2019) for the producers of good X?
e. How is the tax burden divided between producers and consumers? Explain your results.

using the interpretations of income elasticity theory, what types of goods are these:
1.71
.53
.99
.01

What is Ricardian Theory of Trade and Theory of comparative cost ? Are they the same?

can electric utility companies always raise their total revenue by raising their rates? Explain your answer.

What kind of elasticity is relevant when you are trying to figure out how a price cut by the burger shop next door will affect the demand for your pizza? Explain your answer

Coffee and cakes are complements in consumption.Both products have inelastic demand.Assume that a drought in Brazil destroys half of coffee . bean crops.Use diagrams to answer the following:

1. What would happen to the coffee bean market
2. What would happen to the price of coffee and total expenditure of coffee
3. What would happen to the price of cakes and total expenditure of cakes.

Suppose a perfectly competitive firms demand cube is below its average total costs curve.explain the conditions under which a firm continues to produce in the short run.

2.) suppose the industry equilibrium price of residential housing is $100 per square foot and a minimum average variable cost for a residential construction contract is $110 per square foot. What would you advice the owner of the firm to do, explain your answer

To what extent business models are in line with the classical theory of the firm

Assume that in the year 2007 stock and net fixed assets amounted to ksh 22 m and 30 m respectively sales amounted to 50 m. Calculate the stock and fixed assets as a percentage of sales.

31. Consider an economy described by the following equations. Ip = 700 X = 100 T = 1500 Y* = 10000 Cd = 1800 + 0.6(Y-T) G = 1500 M = 0 u* = 4 where Cd is consumption on domestically produced goods, G is government expenditure, M is imports, u* is the natural rate of unemployment, P is planned investment spending, X is exports, T is tax revenue and Pis potential output. Derive the equation for planned aggregate expenditure as a linear function of output, Y. Find the short-run equilibrium for this economy. Illustrate the equilibrium on a 45-degree diagram. Suppose there is a decrease in planned investment spending from 700 to 500. a. Calculate the effect on short-run equilibrium. b. Calculate and explain the multiplier. c. Illustrate your answer on the diagram. d. Calculate the change in the output gap for this economy.

How would each of the following affect Helena’s labour supply decision? Be
specific on what happens to her individual labour supply curve.
a) The value of Helena’s home triples in an unexpected hot real estate market.
b) Originally an unskilled worker, Helena acquires skills that give her access to a
higher-paying job.
c) A temporary income tax surcharge raises the percentage of her income that she
must pay in taxes