Economics Answers

1.      The demand function for plantains is Qd =100 – 6P while the supply for plantains is

Qs = 28 + 3P where Qd is the quantity demanded, Qs is the quantity supplied and P is the price of plantains.

(a)   Calculate the equilibrium price and quantity for plantains.

(b)   Plot the data on a graph

(c)    On the same graph increase the supply of plantains,.

(d)   State what is the impact on equilibrium price and quantity?

1.      Jose spends her income $40 on two goods. Good X and Good Y. The price of good X is $8 and price of good Y is $2.

(a)   Draw the budget constraint to show how Jose can spend his money on the two goods.

(b)   Calculate the slope of the budget line.

(c)    If the price of good X increase by $2 what will happen to the budget line?

(d)   If the price of good Y decreases by $1 what will happen to the budget line? 

1. Complete the table below and draw the TP, MP and AP curves.

Units of labour Total Production (TP) Marginal Product (MP) Average Product (AP)

0 0

1 20

2 50

3 90

4 120

5 140

6 150

7 150

8 140

(a) Indicated from which unit of labour does diminishing marginal returns occur ________

(b) On a marginal product curve the following

(i) Maximum total product

(ii) Increasing total product

(iii) Decreasing total product

Sarah has the following assets and liabilities on the 1st of February 2021

Accounts payable-$7,000 Accounts receivable-$6,000

Machinery-$60,000 Cash at bank-$29,000

Motor vehicle-$65,000 Cash in hand-$3,000

Inventory-$10,000 Capital-$166,000

On 2nd February 2021 the following transactions took place

1) Purchased goods $2000 by cash.

2) Paid the creditors $700 by cheque.

You are required to prepare the statement of financial position of Sarah using the vertical format on the 2nd of February 2021,after the above transactions have taken place.

Complete the columns to show the accounting effects of the following transactions.

Transactions Assets Liabilities Capital

Owner introduced capital $6,000 by bank

Sold goods on credit to James $6000

Purchased goods $2,800 by cash.

Obtained a loan from Nuwan$4,000by cash.

Bought furniture’s for $3,000 by cheque

An engineering technology group just purchased new CAD software for $5000 now and annual payments of $500 per year for 8 years starting 4 years from now for annual upgrades. What is the present worth of the payments if the interest rate is 8% per year?

The accountant of Pink Lady Company was tasked to perform monthly bank reconciliation. She downloaded the company's October 31 bank statement that showed a balance of P64,800. She also printed the cash ledger from the company's computerized accounting system. It states an ending balance of P16,700. She also found the following items:

a. The bank statement showed bank service charge of P1,600.

b. The bank collected P3,000 from a note receivable for PX Manufacturing. P500 was charged as a collection fee.

c. Deposits in transit, P102,000.

d. Checks outstanding on November 30, P 158,200.

e. The accountant found a check issued to Oragon Corporation for P9,000 that cleared the bank but was not in the ledger.

A firm is employing 100 workers at a wage rate(W) = $l5lhour and 50 units of capital at a

rental rate® = $30lhour. At the firm's current input use, the marginal product of labor is 45 and

the marginal product of capital is 60. Is the firm producing its current level of output at the

minimum cost

a) Yes because MPL/W > MPK/R.

b) Yes because W<R

c) No because MPL/W > MPK/R

d) No because MPL < MPK

Carlo plants cucumber in his backyard. 1 pack of seeds yields 3 kilos of cucumber, 2 packs 5 kilos of cucumber and 3 packs of seeds yielded 6 kilos. One pack of seeds costs P100. Graph the production function and total cost curve.

Compute the following to get the equilibrium price and quantity.

1) Qd= 30-5P

2) Qs= 0+5P