Economics Answers

1. What role do incentives play in each of the following situations?

a. You learn that you can resell a ticket to next week’s football game for twice what
you paid.

b. A provincial government announces a “sales tax holiday” for back-to-school
shopping during one week in August.

why are externally presented reports required to be prepared according to generally accepted accounting principles while internally presented managerial accounting reports are not?

The CEO claimed he could that he can set any price he wishes and sel as many of his product he wants at that price. is this correct? motivate your anser.

Explain with diagrams and relevant examples, three categories of price elasticity of demand.

A monopolist faces a demand curve Q = A – P and has a cost function C(Q) = cQ. Derive
the optimal monopoly price and its total profit.

Lonewolf Ltd is the sole manufacturer and supplier of solar panels in the country. As a result of this the CEO claimed in a recent meeting that he can set any price he wishes and sell as many units of his products as he wants at that price. Is this correct? Motivate your answer.

Explain who would benefit and who would lose in the local economy as a result of the duty free importation of chicken.

Three managers of the Unilever Pakistan are discussing a possible increase in production. Each suggests a way to make this decision.
Kashif: We should examine whether our company’s productivity—gallons of potion per worker—would rise or fall.
Jamal: We should examine whether our average cost—cost per worker— would rise or fall.
Ahmad: We should examine whether the extra revenue from selling the additional potion would be greater or smaller than the extra costs.
Who do you think is right? Why?

Mr chan and Mr lee are secondary school teachers. They earn the same salary of $30000 a month.

(a) Explain whether Mr Chan 's and Mr Lee's opportunity cost of being a teacher would definitely be the same.

(b) Explain whether the opportunity cost of quitting their jobs as teachers would definitely be the same.

Suppose I borrowed $100 of principal that must be repaid at the end of two years, along with interest of 4% a year. If the annual inflation rate turns out to be 8%
What is the real rate of interest on the loan?