Economics Answers

AB.Co applies overhead to jobs a predetermined rate of $1.25 per direct labor hour. For 2008, actual overhead was $25,750; overhead was over applied by $1500. What estimate of actual activity in direct labor hours did AB Co. Assume when establishing its overhead rate for 2003.

a. Suppose you are a manager of a County government project that is meant to provide rent-regulated housing units in low-income settlements. Using your knowledge of equilibrium, advice the Governor whether this policy will be a success.

4. Kristen and Anna live in the beach town of Santa Monica. They own a small business in which they make wristbands and pot holders and sell them to people on the beach. As shown in the table on the following page, Kristen can make 15 wristbands per hour but only 3 pot holders. Anna is a bit slower and can make only 12 wristbands or 2 pot holders in an hour.

"Changes in policy of large countries affect the world economy." Do you agree? Why?

a. Suppose you are a manager of a County government project that is meant to provide rent-regulated housing units in low-income settlements. Using your knowledge of equilibrium, advice the Governor whether this policy will be a success.

b. A Monopolist producing and supplying cooking gas to Mombasa city faces the demand function.

Q = 8800 – 20P. Its cost function is given by TC = 20Q + 0.05Q2.

i. Determine the quantity of cooking gas she will produce and the price she will charge to maximize profits and determine her profit.

ii. Explain how her profits she will affected if regulators forced her to operate like a perfectly competitive firm.

iii. Illustrate and compute dead-weight loss and lost consumer surplus associated with her Monopoly operations.

. Explain the relationship between inflation and unemployment both in the short run and long run.

Suppose a Mrs. Chakay marries her butler, Ato Tachakay. After they are married, her husband continues to wait on her as before, and she continues to support him as before (but as a husband rather than as an employee). How does the marriage affect GDP? How should it affect GDP?Justify your debate.

Find data on GDP and its components, and compute the percentage of GDP for the following components for 1950, 1975, and 2000.

a. Personal consumption expenditures; b. Gross private domestic investment; c. Government purchases; d. Net exports; e. National defense purchases; f. State and local purchases; g. Imports

* Do you see any stable relationships in the data? Do you see any trends? (Hint: A good place to look for data is the statistical appendices of the Economic Report of the President, which is written each year by the Council of Economic Advisers. Alternatively, you can go to www.bea.doc.gov, which is the Web site of the Bureau of Economic Analysis.)

Suppose a Mrs. Chakay marries her butler, Ato Tachakay. After they are married, her husband continues to wait on her as before, and she continues to support him as before (but as a husband rather than as an employee). How does the marriage affect GDP? How should it affect GDP?Justify your debate.

A farmer grows a bushel of wheat and sells it to a miller for birr100. The miller turns the wheat into flour and then sells the flour to a baker for birr 300. The baker uses the flour to make bread and sells the bread to Rift Valley University for birr 600.The Rift Valley University students eat the bread. What is the value added by students? What is GDP?