Economics Answers

In 2000 Jengka Inc. issued bonds with an 8 percent coupon rate and a RM1,000 face
value. The bonds will mature on March 1, 2025. If an investor purchased one of
these bonds on March 1, 2012, determine the yield to maturity if the investor paid
RM1,100 for the bond.

Power of Tower Inc. has bonds that mature in 6½ years with a par value of RM1,000.
They pay a coupon rate of 9% with semiannual payments. If the required rate of
return on these bonds is 11% what is the bond's current value?

You discover an antique in your attic that you purchased at an estate sale 10 years
ago for RM400. You auction it on eBay and receive RM8,000 for your item. What
annual rate of return did you earn?

(a) Given the following monotonically transformed utility function faced by the consumer
U(X1X2) = X_1^0.5 X_2^0.5
The price of good X1 is P1 and the price of good X2 is P2. Derive the optimal demand (Marshallian demand) function for X1 and for X2.

Given the following estimated demand equation,

Where Qy is the quantity demanded of good Y, Py is the price of good Y, I is the income of the consumer, Px,Pw and Pz are the prices of good X, W and Z respectively. Py = 100, Pw = 300, Pz = 400, Px =100 and M = 40,000. Compute income elasticity of demand, own-price elasticity of demand and the three cross-price elasticity of demand.

Mr. Hassan’s demand function for rice is given by
X = 15 + M (10P) -1
Where X = amount of rice demanded, M = income of the consumer, P = price of rice.
Originally, the income of Mr. Hassan is 4,800 per month and the price of rice is kshs. 120/kg. If the price falls to kshs 100/kg, calculate to total effect (TE), substitution effect (SE) and Income effect (IE) emanating from this change in price

Under a perfect competition the price as sh. 6 per unit has been determined. An individual firm has a total cost function given by C=10+15Q - 5Q^2+Q^3/3. Find:
Revenue function
The quantity produced at which profit will be maximum profit
Maximum profit

(a) Given the following monotonically transformed utility function faced by the consumer
lnU(X1X2) = ∝lnX1+βlnX2
The price of good X1 is P1 and the price of good X2 is P2.
Construct the corresponding Langregian function
Derive the optimal demand (Marshallian demand) function for X1 and for X2

Under a perfect competition the price as sh. 6 per unit has been determined. An individual firm has a total cost function given by C=10+15Q - 5Q^2+Q^3/3. Find:
Revenue function
The quantity produced at which profit will be maximum profit
Maximum profit

An open macroeconomic model for a hypothetical economy is represented as follows

Y= C0 +Io+Go+X0-M, M=mo+m1yd,C=co+c1yd, T=tY and Yd=Y-T

Show that equal change in tax and government expenditure are expansionary to the economy
Derive the equilibrium level of savings in the economy above
Derive the investment multiplier