Economics Answers

Suppose that the Acme Gumball Company has a fixed proportions production function that requires it to use two proportions production function that requires it to use two gumball presses and one worker to produce 1000 gumballs per hour . Explain why the cost per hr of producing 1000 gumballs is 2v+w where v is the hourly rent for gumball presses and w is the hourly wage.

A client for whom you have prepared the current tax return approaches you for advice and support for an audit covering the last five returns. You were not involved in the preparation of the previous four.

The client has the written notice from the ATO regarding the audit. What advice will you provide and what support will you give?

question 1.
One of the principles for the code of professional conduct for agents, states:
‘You must take reasonable care in ascertaining a client’s state of affairs, to the extent that ascertaining the state of those affairs is relevant to a statement you are making or an activity you are undertaking on behalf of the client.’
Describe what this means to you in terms of explaining the impact of taxation on the individual.


question 2
Who is likely to be held responsible if a tax agent wilfully included false information, of which the client had no knowledge, in a tax return?

When preparing a client’s tax return they informed you that they had taken an overseas trip for business purposes and on the basis of it being a legitimate expense the costs were included as a deduction.
When the client came to review and sign the tax return photographs of the trip were shown to you that showed the client and the family sightseeing in Europe.
What would you do at this point?

Graphically illustrate and explain the impact of eskom power cuts on the south african economy?

What is elasticity?

Explain why efficiency is not sufficient to address equality issues.

In economy, the consumer expenditure is represented by the following equation:

C = 50 + 0.75 Yd

Assume that investors spend RM500 at every level of income ( I = RM500), net exports are zero
(X – M) = 0, goverment purchases are RM300 and taxes are RM200.

a) Determine the equilibrium level of GDP.
(4)

b) If potential GDP is RM3,000, is there a recessionary or inflationary gap? If so, how much?
(2)

c) What will happen to the equilibrium level of GDP if investors become optimistic about the country’s future and raise their investment to RM600?
(4)

d) After investment has increased to RM600, is there a recessionary or inflationary gap? How much?
(2)

Select a (domestic) public limited company of your choice which has some degree of market power. In an essay of 2400 words or fewer, evaluate the pricing strategies it employs for one of its core products.
Task B must be written as an essay. You will need to build up a case study of your chosen company. You must first demonstrate that the company has some power to set its own price (that is, it has some degree of market power) – e.g. what is the structure of the industry it operates in? What is its market share for the product? How concentrated is the industry? To make the task a simple as possible restrict your attention to a single product in a single country (the firm can sell more than one product in many countries but you should focus on one).

The price of oil is $30 per barrel and the price elasticity is constant and equal to -0.5. An oil embargo reduces the quantity available by 20 percent. Use the arc elasticity formula to calculate the percentage increase in the price of oil.