Economics Answers

a)           Consider the following model of National Income determination

                           C= 3000 +0.75 (Y-T)

                           T=1000

                            I= 4750

                           G=1500

                           Y=E=C+I+G

Required:

       i.           Solve for the equilibrium values for all the endogenous variables                          (4 mks)

     ii.           Suppose government expenditure increases by 50 find the new equilibrium values of the endogenous variables                                                                                               (4 mks)

   iii.           Calculate the value of the government spending multiplier                                     (2 mks)

In the circular-flow diagram, the goods markets are where: (2) (a) The households purchase goods from firms; (b) Firms purchase goods from government; (c) Firms purchase goods from households; (d) The government purchases goods from households

An increase in the price of oil is an example of a negative supply shock. Use the AD-AS model graph to explain the effect of a negative supply shock on the price levels and output levels in the economy

Explain, with the use of a graph the impact that an increase in the volume of exports from South Africa to the United States will have on the demand and supply of dollars and the exchange rate in South Africa?

Even when allowed to collude, firms in an oligopoly may choose to cheat on their agreements with the rest of the cartel. Why?

scientists reveal that consumption of oranges decreases the risk of diabetes and at the same time farmers uses a new fertiliser that makes orange tree more productive. state what effect this will have on equilibrium price and quantity

The green company produces chemicals in a perfectly competitive market. The current market price is 40, the firms total cost is C= 100+4Q+Q2

a.How would the increase in fixed cost affect the markets long-run equilibrium price? The number of firms?(Assume thag Green's costs are typical in the market.)

What is a tarriff

Five students share and apartment and all enjoy music equally. The marginal utility of each student is MU(Q) = 5 − 1 50 Q where Q is the number of CD’s in the apartment. Assume that a CD is a pure public good, namely it can be enjoyed but all and nobody in the apartment can be excluded from listening to it even if s(h)e has bought it. ) The cost of a CD is $4. What is the socially optimal number of CD’s in the apartment?

 In the Keynesian model, an introduction of a proportional tax will: