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Graph the supply and demand schedules for hamburger using $5 through $15 as the value of P?
a) Compare diminishing marginal returns and diseconomies of scale?
b) Use a numerical example to show that increasing returns to scale can co-exist with diminishing marginal return. Make sure you explain how your example answers the question.
c) What are the two components of a firm’s cost in the short run, and what are their definitions?
d) How do the marginal and average products of labour affect a firm's marginal and average variable costs in the short run?
e) What does a firm's short-run total product curve show and what is its significance?
Question 2 /20/
a. Mention any 5 concepts used interchangeably with:
i. Lending rate. (5)
ii. Strict monetary policy (5)
iii. Accommodative monetary policy (5)
b. Mention the types of inequality that were seen most during the period of hard lockdown in South Africa. (5)
Suppose the market for agrochemicals has a supply
Sx=30+A and the demand curve of Dq=240-2q assume that the market is perfectly competitive what would the equilibrium price and quantity be?
You have been asked, as a financial manager in Cortex Limited, to consider whether to invest in projects A or B. The expected cash flows for projects A& B over the next 4 years are given. Each project has an initial investment of Rs 150 million (Mn) and the Weighted Average Cost of Capital is 13%.
Years Expected Net Cash flows
Project A 68,65,63,60
Project B 74,76,73,71
Required:
Calculate and interpret your results for each project, using these investment appraisal methods below:
(i) Payback (ii) NPV (iii) IRR (iv) ARR
Suppose that an economy is characterized by the following equations:
C = 400 + 0.75(Y - T)
a = 400 - 25r
G = 200
T = 200
to the private
MS = 2, 000 Derive:
i IS curve
P = 2
(M / P) * d = V - 200r
ii LM curve.
iii Equilibrium level of income and interest rate.
b) Kenya has recently lifted the interest rate cap in a move to revive shrinking cost access
sector. Do you agree with the move? Discuss c) Trade war happens when one country retaliates against another by using import tariffs or placing other restriction on the other country's imports. This can commence if one country perceives a competitor nation has unfair trading practices. Explain the policy implications of trade dispute in an economy.
a. Differentiate headline consumer price inflation from core consumer price
inflation. (4)
b. Mention three examples of headline consumer price inflation. (3)
c. “Low inflation against relatively high lending rates has supported the rand’s
attractiveness as a carry-trade target with yield-hungry investors happy to
ignore local risks for higher returns”. Clearly explain what this implies. (4)
d. What was the main reason for the SARB behind reducing interest rates? (2)
e. Why is it important that South Africa should be consideration of USA’s decisions
when deciding on its monetary policy stance? (3)
f. Why do you think the budget speech is important for monetary policy
committee’s decisions concerning change in interest rates? (2)
g. What does an undervalued currency imply?
b. Mention the types of inequality that were seen most during the period of hard
lockdown in South Africa.
what was the basis for and the pattern of trade according to adam smith? how were gains from trade generated? what policies did Smith advocate in international trade? what did he think was the proper function of government in the economic life of the nation?
- Why do so many developing countries select such poor development policies, and what can be done to improve these choices?
