Economics Answers

Diagrammatically the impact on firms profit if in the short run demand for the product reduces

Q.2  If following are the demand and supply equations for a consumer good:   (20)

        Q^d = 300,000/P (Q^d = quantity demanded)

        Q^s = 30P (Q^s = quantity supplied)

        (P = Price)

           Find the market clearing price and the quantity at the equilibrium. Also sketch the demand and supply curves.

Which of the following factors will increase the size of the multiplier?

Revenue. Is the most important part of buisness discuss its relevance in differnet market situations

Estimating Cost of Capital (WACC)

• What is the book value of debt and equity?

• What are the weights of debt and equity?

• What is the cost of capital?

• What is the weighted average cost of capital for the firm? (Assume tax rate is 35%)

*It is to be done for Apple Inc for the year 2019 and 2020*

7. You are given the following long-run cost function:

TC = 160Q - 20Q2 + 1.2Q3

a. Calculate the long-run average cost and marginal cost. Plot these costs on a graph.

b. Describe the nature of this function’s scale economies. Over what range of output does economies of scale exist? Diseconomies of scale? Show this on the graph.

Refer to Appendix 7B for help in answering Problems 8 and 9.

Suppose a market of T-Shirts can be illustrated by following equations,

demand P = 15-0.5 Q

supply P= 10+0.5Q

Using these equation, determine the equilibrium price and quantity of this market.

Now, suppose that a tax of $4 is imposed on the supplier of this market. What will be the new quantity available in the market? What will be the price paid by consumer? What will be the price received by producer? Draw a diagram to illustrate the market.

You are given the following long-run cost function:

TC = 160Q - 20Q2 + 1.2Q3

a. Calculate the long-run average cost and marginal cost. Plot these costs on a graph.

b. Describe the nature of this function’s scale economies. Over what range of output does economies of scale exist? Diseconomies of scale? Show this on the graph. 

Two separate capacity constraints are discussed in this chapter: (1) the actual physical capacity of existing plants and equipment, shown as the vertical portion of the short-run AS curve, and (2) potential GDP, leading to a vertical long-run AS curve. Explain the difference between the two. Which is greater, full-capacity GDP or potential GDP? Why?

Part One: Attempt all of the following questions

2, Researcher is using data for a sample of 10 observations to estimate the relation                       between consumption expenditure and income. Preliminary analysis of the sample data produces the following data.

 Sum (xy=700), (sum x square = 1000), (sum x=100), (sum Y= 200)

A, Use the above information to compute OLS estimates of the intercept and slope    coefficients and interpret the result

B, Calculate the variance of the slope parameter

C, Compute the value R2 (coefficient of determination) and interpret the result 

D, Compute 95% confidence interval for the slope parameter 

E, Test the significance of the slope parameter at 5% level of confidence using t-test

3. If the model Yi=( +(1X1i +(2X2i +Ui is to be estimated from a sample of 20 observation using the semi- processed data given in matrix in deviation form.

             =10, =25 and 

Obtain the OLS estimate of the above parameters.