Economics Answers

Mr maneno is considering investing in a risky project which would be added to an existing portfolio. He foresees five possible status of the economy as follows.
Status of the probability return on return on proposed
Economy of existing portfolio investment
A 0.2 16% 12 %
B 0.4 18% 11 %
C 0.2 20% 10 %
D 0.1 22% 9%
E 0.1 24% 8%

The risk free rate of interest is 9%p.a.
Required:
a) Determine whether the proposed project is acceptable. (10 Marks)
b) Explain to Mr Maneno on the usefulness of CAPM in project appraisal.
( 5 Marks)

Explain what will happen to consumer and producer surplus and deadweight loss if the government imposes a tax on sellers for each radio they produce in order to raise government income? Include in your answer an explanation of the three concepts – consumer surplus, producer surplus and deadweight loss.

"At the moment, the market is completely ignoring things like record US trade deficits and the widening current account deficit. It is also largely ignoring the possibility of Federal Reserve rate cuts. Traders and investors are instead focusing only on the fiscal and monetary easing in Japan and monetary easing in Germany."

a. In what way is fiscal easing in Japan relevant here?

b. In what way is monetary easing in Germany relevant here?

a. Explain the link between scarcity, choice and the production possibility curve. In your answer use graphs and include a description of the three concepts in your own words (300 words maximum).


b. Outline the major factors that determine the type of economic system existing in a country. Based on the factors you noted above, describe the principal differences between the Australian economy and the Chinese economy (300 words maximum).

a. There has been a breakthrough in the manufacturing of solar-powered motor vehicles that will substantially reduce their costs of production. Use demand and supply curves to illustrate what will happen to:
i) the equilibrium price and quantity of solar-powered motor vehicles.
ii) the equilibrium price and quantity of conventional motor vehicles.


b. In an attempt to increase the use of solar-powered motor vehicles the government decides to set a minimum price for solar-powered vehicles that is below the market price. Do you think this is a good idea? Explain your decision using graphs.
(with diagrams)

Explain what will happen to consumer and producer surplus and deadweight loss if the government imposes a tax on sellers for each radio they produce in order to raise government income? Include in your answer an explanation of the three concepts – consumer surplus, producer surplus and deadweight loss.
(300words)

1.Explain what will happen to consumer and producer surplus and deadweight loss if the government imposes a tax on sellers for each radio they produce in order to raise government income? Include in your answer an explanation of the three concepts – consumer surplus, producer surplus and deadweight loss. (With graph)(300words)


2.a. There has been a breakthrough in the manufacturing of solar-powered motor vehicles that will substantially reduce their costs of production. Use demand and supply curves to illustrate what will happen to:
i) the equilibrium price and quantity of solar-powered motor vehicles.

ii) the equilibrium price and quantity of conventional motor vehicles.

b. In an attempt to increase the use of solar-powered motor vehicles the government decides to set a minimum price for solar-powered vehicles that is below the market price. Do you think this is a good idea? Explain your decision using graphs.

What are the components of aggregate income and components of aggregate outcome?

As I really think your comment is very helpful, I was wondering whether you could help me with my current challenge:
Demand: Q = 200 – 5P.
Government protection: 20% tax on imported automobiles (your only competitors) and a $10 subsidy for every unit sold. It is assumed that every unit produced will sell, though the price will adjust until the point where the market will clear.
The cost curve for your organization is TC = 20 + 2Q.

How can I derive a supply function from these inputs? Is there a way?
To maximise revenue is it enough to just say MR = 40 - 0.4Q = 0?
What is the net effect of the subsidy provided by the government at the profit-maximising output?

Differentiate between Optimal efficient tax structure and optimal tax system