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1. Draw indifferences curves to represent each of the following type of preferences.
(i) A customer is always pleased to change 5 sweet candy for 1 chochlate bar.
(ii) A customer always desires 2 glasses to wear with 1 frame.
(2) (a) What is product differentiation? In what market structure is this an essential feature? Briefly explain, at least, three different ways firms in this industry differentiate their products from those of other firms.
(b)Suppose a firm in this industry faces the following demand and total cost functions:
P = 5900 – 10Q
3 2
TC = 2Q - 4Q +140Q + 845.
Determine the profit maximizing output the firm should produce, the market clearing price and the total profit (if any) to be earned.
1. Draw indifferences curves to represent each of the following type of preferences.
(i) A customer is always pleased to change 5 sweet candy for 1 chochlate bar.
(ii) A customer always desires 2 glasses to wear with 1 frame.
1. Draw indifferences curves to represent each of the following type of preferences.
(i) A customer is always pleased to change 5 sweet candy for 1 chochlate bar.
(ii) A customer always desires 2 glasses to wear with 1 frame.
Explain 5 ways the government ensures national income statistics is correct
If a small percentage decrease in the price of chocolate causes a larger percentage decrease in the quantity supplied, what happens
- Assume that in 2015, the following prevails in the republic of Nurd
Y= $200
C= $160
S= $40
I (Planned)= $30
G= $0
T= $0
d. Suppose Y = $200, C = $160, S = $40, and I = $40. Is Nurd’s economy in equilibrium?
e. Starting with the situation in part d, suppose the govern-ment starts spending $30 each year with no taxation and continues to spend $30 every period. If I remains constant, what will happen to the equilibrium level of Nurd’s domestic product (Y)? What will the new levels of C and S be?
f. Starting with the situation in part d, suppose the govern-ment starts taxing the population $30 each year without spending anything and continues to tax at that rate every period. If I remains constant, what will happen to the equilibrium level of Nurd’s domestic product (Y)? What will be the new levels of C and S? How does your answer to part f differ from your answer to part e? Why?
- Assume that in 2015, the following prevails in the republic of Nurd
Y= $200
C= $160
S= $40
I (Planned)= $30
G= $0
T= $0
Assume that households consume 80 percent of their income, they save 20 percent of their income, MPC = 0.8, and MPS = 0.2. That is, C = 0.8Yd and S = 0.2Yd.
a. Is the economy of Nurd in equilibrium? What is Nurd’s equilibrium level of income? What is likely to happen in the coming months if the government takes no action?
b. If $200 is the “full-employment” level of Y, what fis-cal policy might the government follow if its goal is full employment? c. If the full-employment level of Y is $250, what fiscal policy might the government follow?
c. If the full-employment level of Y is $250, what fiscal policy might the government follow?
The following entries have been passed by an accountant. State whether these entries are correct or not. Prepare the correct journal entries. Date
Cash A/c Dr.
To Interest A/c Cr.
(Being interest paid)
7,000
7,000
Sohan’s A/c Dr.
To Purchases A/c Cr.
(Being purchase of goods from Sohan in cash)
10,000
10,000
Hari Om’s A/c Dr.
To Sales A/c Cr.
(Being cash sales to Hari Om)
5,000
5,000
Mukesh A/c Dr.
To Bank A/c Cr.
(Being salary paid for the month)
10,000
10,000
what is the difference between internalization and globalization in economics (20)
