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Demand and supply functions of a commodity are given respectively as quantity demanded 40 at 400, quantity supply 120 naira per 24 unit. Determine the equilibrium of quantity bought
Suppose you are a monopolist and find that the demand elasticity of your product is different in two markets. What would be your pricing strategy?
Show diagrammatically the impact on the firms profit if in the short run demand or the product reduces.
Assume that you just won the state lottery. Your prize can be taken either in the form
of $40,000 at the end of each of the next 25 years (that is, $1,000,000 over 25 years)
or as a single amount of $500,000 paid immediately.
a) If you expect to be able to earn 5% annually on your investments over the next
25 years, ignoring taxes and other considerations, which alternative should
you take? Why?
b) Would your decision in part a) change if you could earn 7% rather than 5% on
your investments over the next 25 years? Why?
c) On a strictly economic basis, at approximately what earnings rate would you
be indifferent between the two plans?
The cross-price elasticity of demand for peanut butter with respect to the price of jelly is -0.3.
If we expect the price of jelly to decline by 15%, what is the expected change in the quantity
demanded for peanut butter?
Discuss what a financial system is and the key role that any financial institution plays in an economy. What are the main reasons for regulating financial institutions and how do the regulators do this?
- Looking at the IS-LM model, please explain what would happen if your local currency depreciates against the currency of your major trading partner. Would the situation be the same when your economy is in a liquidity trap? Why? Why not?
- Let the national income model be Y = C0 + c (Y – 3tY) + I + G + X – M, where C0, I, G, X, and M are given. The government considers increasing G by EUR 1 million. Assuming c = 0.3 and t = 0.15, what would be the expected change in the national output?
given market demand Q=100-P if the market supply function for the smaller firms is given by S=0.5P. And the cost function of the dominant firms is TC=10+40QD, where QD= output of the dominant firm. a) Find the market price and output of the dominant firm at equilibrium. b) Find the output level to be supplied by the smaller firms.
ur operating firm plans to take tourists between Addis Ababa and Jimma. its estimated cost function given by C =100 +50 N+4N2 (Where N denotes the number of passengers per day)
A. State the average cost function.
B. State the marginal cost of the average cost function.
C. Find the number of passengers per day that minimize average cost.
D. What is the minimum average cost at the optimal level of passenger?
E. What will be the total cost at the optimal level?
