Economics Answers

A researcher estimated that PED for motor vehicles in a country is -1.2 while income elasticity is 3.0. Next year the automobile makers intend to increase average price of motor vehicles by 5% and expect consumer income to increase by 3%

a. If sales of the vehicles are 10million this year. How many do you expect the automaker to sell next year?

b. By how much should the automakers increase the price of motor vehicles if they wish to increase sales by 5% next year?

With reference to the extract debate if Herzberg's Two Factor Theory can be effective at increasing the Meaning Quotient (MQ) of work.

A purely competitive firm finds that the market price for its product is $25.00. It has a fixed cost of $100.00 and a variable cost of $15.00 per unit for the first 50 units and then $30.00 per unit for all successive units.

Suppose Ashok's utility function is u={r/1000}1/2. His initial income when healthy is36000 . however there is 50% chance that he will face financial loss on being ill and income is likely to reduce by 20000.1) find the expected value of his income? 2) what expected utility he will have given the possible state of his health? 3) what is the risk premium he will be willing to pay to cover the risk of sickness.

Assume that the cyclical unemployment rate in a country is 6% whereas the structural unemployment rate is 8%. What is the number of unemployed persons given that labour force in this country amounts to 100 million ?

Describe the key features of organisational policy and procedures relating to the preparation of tax documentation for individual taxpayers.

An individual who is not an existing client approaches you in early November stating that the income tax return for the financial year has not been prepared or lodged. The individual is aware that tax agents can lodge later than the October 31 deadline so requests that you prepare and lodge the tax return to avoid penalties. What advice do you give this individual?

Suppose demand for good A is given by DA = 500 - 10 Pa + 2 Pb + 0.70I where Pa is the
price of good A, Pb is the price of some other good B, and I is income. Assume that Pa is
currently $10, Pb is currently $5, and I is currently $100.
a. What is the elasticity of demand for good A with respect to the price of good A at the
current situation? Interpret the nature of elasticity of demand.

A fixed exchange rate country experiences upward pressure on the exchange rate value of its currency. The central bank chooses to intervene in the market to maintain its fixed exchange rate. How would the central bank go about intervening? If the pressures for the currency to appreciate persist, would it be difficult to maintain the fixed exchange rate?

Mercury Airlines’ marginal revenue and demand curves cross the marginal cost curve at
quantities of 3,000 and 6,000 seats a week, respectively. All other data remain the same.
a. Calculate the profit under policies of (i) uniform pricing, and
(ii) Complete price discrimination.
b. Suppose that Mercury implements complete price discrimination. Explain why it
should sell up to the quantity where the buyer’s marginal benefit equals Mercury’s
marginal cost.