Economics Answers

Radisson Hotel had compiled a past year (2017) data on the numbers of rooms demanded by its clients as a result of room rate changes. During the off-peak season in May, a promotion was held and it discounted the room rate from $550 to $400. This promotion of room rate had brought in 700 room stays compared to 350 rooms stays before the room rate adjustment.                       

Calculate the price elasticity of demand of Radisson Hotel’s clients

Suppose the demand for commodity X as the function of its own price and consumer’s money income,

keeping other factors constant is described by the following equation:

X = 100,000 – 2PX + 7M; where M is consumer’s money income in Birr and PX is price of the

commodity X in Birr. If the price is Birr 10,000 and money income is Birr 15,000, then:

a. what is the total demand for X at the prevailing market price and income

b. calculate the income elasticity of demand for the commodity &; comment on the type of elasticity and

type of commodity

c. calculate the price elasticity of demand for the commodity and determine the type of elasticity

Suppose that the consumer’s utility function is given by 1/ 2 1/ 4 U  10X Y . If price of good X and Y are 4 and 2

respectively and income constraint is Birr 100.

a. The demand equation for X and Y.

b. The utility maximizing levels of X and Y.

c. The maximum utility.

d. Compute both X ,Y Y ,X MRS and MRS . Is there any difference between the two?

On what market imperfection does the four theories of aggregate supply rely?

A man wishes to have an amount of P2,769.84 after 5 years. He deposited P500 each year into a savings bank that pay “r” percent per annum compounded continuously. Compute the value of “r”. 

ERP systems have many disadvantages, such as being complex, very expensive, and difficult to implement. However, they have powerful advantages, such as better customer service, more integrated operations, and access to all or most of an organization’s data. If you were asked to determine if your company should implement an ERP system, how would you determine whether the benefits of a new system outweigh its disadvantages? Write 100 words for the answer.

 Suppose individual demand schedules for A, B and C are given as follows:Find:(a) market demand schedule(b) market demand curve;(c) elasticity when price falls form $15 to $10; and(d) elasticity when price rises from $10 to $5.

An old boiler cost 2,400 a year to maintain. What expenditures for a new boiler is justified if no maintenance will be required for the first 3 years, 600 per year for the next 7 years, and 2,400 a year thereafter? Assume moounded annually and no other cost to be considered.

Mr. Ayala borrows 100,000 at 10% effective annual interest. He must pay back the loan over 30 years with uniform monthly payments due on the 1st day of each month. What does Ayala pay each month? 

The exact simple interest of 5000 invested from February 28, 2000 to December 31, 2000 is 1000. What is the rate of interest?