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Suppose that when Mary’s income increases from RM56,000 to RM60,000 per year, her
purchase of good B decreased from 10 units to 5 units.
i. Calculate the coefficient of income elasticity of demand.
ii. Interpret the value of the coefficient above.
Use the production possibility frontier (PPF) to illustrate and explain the scarcity, choice and opportunity cost of a farmer who is producing maize and sorghum.
Johannes sells his 2 bedrooms apartment for R920000. The total commission is 8,4% of the selling price of which the sales agent receives 3 quarters and the rest will be used to pay the transfer fee. The sales agent receives:
(1) R52 142.86
(2) R57 960
(3) R19 320
(4) R77 280
Ernie owns a water pump. Because pumping large amounts of water is harder than pumping small amounts, the cost of producing a bottle of water rises as he pumps more. Here is the cost he incurs to produce each bottle of water:
Cost of first bottle $1
Cost of second bottle 3
Cost of third bottle 5
Cost of fourth bottle 7
a. From this information, derive Ernie’s supply schedule. Graph his supply curve for bottled water.
b. If the price of a bottle of water is $4, how many bottles does Ernie produce and sell? How much producer surplus does Ernie get from these sales? Show Ernie’s producer surplus in your graph.
c. If the price rises to $6, how does quantity supplied change? How does Ernie’s producer surplus change? Show these changes in your graph.
Indicate whether you agree and disagree with the following statements. Note that you need to write the justification that support your response.
1.The economy in New Keynesian School can be characterized by market imperfections and sticky prices and wages. However, money is assumed affecting real sector.
2.Money supply is endogenous and exogenous in the case of flexible and fixed exchange rate regimes, respectively
3.The 1970s price shock brought attention of rational expectation into macroeconomics
Macro-economic objectives how use measures
W Co is a retailer of barrels. The company has an annual demand of 30,000 barrels. The barrels
cost TZS 2 each. Fresh supplies can be obtained immediately, with ordering and transport costs
amounting to TZS 200 per order. The annual cost of holding one barrel in stock is estimated to
be TZS 1.20.
A 2% discount is available on orders of at least 5,000 barrels and a 2.5% discount is available
if the order quantity is 7,500 barrels or above.
Required: Calculate the EOQ ignoring the discount and determine if it would change once the
discount is taken into account.
Assuming the about run cost function of a firm is given by:TC=4Q3+3Q2+10Q+30.
a)find the expression of TFC and TVC.
b) derive the expression of AFC,AVC,AC and MC.
c) find the levels of output that minimize MC and AVC.
d) find the minimum values of MC and AVC
Consider a firm who involved in investment of coffee production short run with a function given by:Q=10KL-4L2-2K2 where Q is quantity of coffee production, L is labor input and K is fixed capital input (K=8).
a) determine the average product of labor APL function
b) at what level of labor does the total output of coffee yield reach the maximum?
c) what will be the maximum achievable amount of cut-flower production?
What is the main difference between cardinal and ordinal utility approaches?
#340153 on Dec 2023