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Which one of the following will give rise to a rightward shift of the AD curve? A. Households decide to increase their saving rate. B. There is a sharp and sustained increase in share prices on the JSE. C. Personal tax rates are increased. D. The SARB increases the repo rate. E. Real government spending is lowered.
If two countries have differing opportunity costs of production for two goods, then _____
The government of an open economy determines that the current equilibrium level of income in the economy is lower than the fullemployment level of income and wishes to close this gap. The Minister of Economic Affairs hears that you have just studied the Keynesian model of the macroeconomy and approaches you for advice. Which one of the following suggestions would be inappropriate in this context?
A. Create a more favourable environment for investment spending. B. Spend more on infrastructural projects (for example the construction of new roads). C. Encourage households to save a larger proportion of their annual income. D. Reduce the rate of taxation. E. Try to reduce imports by encouraging households and firms to purchase locally manufactured consumer and capital goods.
If the population of India suddenly grew because of a large immigration, what would happen
to wages? What would happen to the rents earned by the owners of land and capital?
Show that a monopolist produces a lower quantity and charges a higher price as compared
to a perfectly competitive firm.
A monopoly firm faces a linear demand curve P = 10 – 0.5 Q. Its MC is constant at Rs. 4.
What is the welfare loss on account of monopoly?
Given that TC = 20,000 + 4 Q + 0.5 Q2
, determine the equations for TFC, TVC, AFC, AVC, AC,
MC. Confirm that MC = AVC at the minimum point of the AVC curve.
What is main difference between fixed input and variable input? Give two examples for each?
Consider a consumer who consumes two goods, X and Y. Show the impact of fall in price
of good Y on the consumption of good Y (i) if good Y is an inferior good (ii) good Y is a Giffen
good.
Draw the marginal-cost and average-total-cost curves for a typical firm. Explain why the
curves have the shapes that they do and why they cross where they do.
