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Using diagrams and the concept of elasticity of demand to support your answer, explain how both UK rail companies and airways go about filling seats in order to maximise revenue?
2.1 Consider the production function: Y=2X + 16X2- 0.4X3 a) Derive marginal value product (VMP) and average value product (AVP) equations. [04] b) At what levels of X do the TPP reach its maximum? [03] c) At what level of X does stage two (II) begin or stage one (I) end? [04] d) Find and interpret elasticity of production (EP) when X = 1. [02] 2.2 Market structures are referred as the competitive environment in which the buyers and sellers of the product operate. A market consists of all the actual and potential buyers and sellers of a particular product. Discuss thoroughly oligopolistic and perfect competitive market structure and give examples of each form of the market structure. [08] 2.3 Differentiate between product market and labour market (Use diagrams that explain the interactions in the markets). [04
2.1 Consider the production function: Y=2X + 16X2- 0.4X3 a) Derive marginal value product (VMP) and average value product (AVP) equations. [04] b) At what levels of X do the TPP reach its maximum? [03] c) At what level of X does stage two (II) begin or stage one (I) end? [04] d) Find and interpret elasticity of production (EP) when X = 1. [02]
1.2Suppose that Rose’s monthly income is 200 R/month and she spends her income on two goods: movies and books. The price of movies is Pm=R20 and price of books Pb=R10. Answer the following questions. a) Suppose she spends all her money on these two goods. Draw her budget constraint. Show at least 4 points on this constraint which are attainable (Put books on the horizontal axis). [05] b) Last month she went to movies 5 times and bought 10 units of books. Is this attainable for her? Show it on the figure you sketched in ‘a’. [03] c) Suppose the price of movies increased to R25. Sketch her new budget line. Can you tell from this information how she could allocate her budget between the two goods in order to maximize her utility? Show your workings. [06
1.1 Kagiso has R30 to spend on sugar and salt. Kagiso’s marginal utilities from sugar and salt are shown in the following table. Quantity of sugar MU Quantity of salt MU 1 20 1 40 2 12 2 20 3 9 3 9 4 5 4 7 5 3 5 5 6 1 6 3 i. Suppose that a unit of sugar is priced at R5 and the price of a unit of salt is R10. Compute the weighted marginal-utility for sugar and salt and enter these values in the table. [04] ii. Given Kagiso’s R30 budget, how many units of sugar and salt will be purchased? Explain how you arrived at this answer. [02] iii. Suppose the price of salt stays constant at R10 and the price of sugar falls to R3. How many units of sugar will be demanded at this price? Carefully explain your reasoning. [03] iv. Draw Kagiso’s demand curve for sugar. Does it conform to the law of demand? Why? [02
What is the budget where tax collected exceeds the required expenditures?
Suppose the supply of lemonade is given by Q= 40p were q is measured in pints and p is measured in cents per pint and the demand for lemonade is given by Q=5000-10p. Now suppose bumper weather conditions improve the harvest of lemons so producers increase the quantity supplied of lemonade by 200 pints at every price. What are the equilibrium P and Q for a lemonade after the bumper weather conditions
Opportunity cost is about making choices and how you adequately and effectively manage it.what do you understand by the concepts of intra and inter temporal choice models in managerial economics, further as a fresh graduate of Msc in managerial economics, clearly demonstrate how intra and inter temporal choice models make society incur an opportunity cost if not managed adequately and effectively?
As a finance manager of Kersot Enterprise Limited, where the Board of Trustees is reviewing the mix of the capital structure of the enterprise based on target value and has decided to raise 40 percent of new funds from long-term debt, 10 percent from preferred shares, and 50 percent from ordinary shares with components of 5.6, 10.5 and 15.7 respectively.
Estimate percentage of this BEST MIX for the enterprise and support the decision taken.
. It is sometimes argued that economic growth that is "too rapid" will be associated with inflation. Use the Aggregate Demand and Aggregate Supply model to show and explain how this statement might be true and which shock is assumed to be hitting the economy?
