Economics Answers

Use demand and supply curves to illustrate and explain why rare items, such as the Mona Lisa painting by Leonardo da Vinci, are sold at such high prices

a and b are equal partners with capitals 2,00,000 and 1,00,000 respectively. as per deed, they are allowed a interest @8% on capital . during the year the firm earned a profit of rs 12,000. interest in capital allowed to a will be

 “Many believe that the main objective of government economic policy should be to increase productivity and economic growth.”

Using the data above and your economic knowledge, critically evaluate this statement by providing THREE reasons for and THREE reasons against. Ensure that you provide a relevant real-world example from the given Caribbean economy to support EACH point. (24 marks

What kinds of market failures are present in the economic self-discovery framework, and how may they be overcome?

Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium (i.e., supply equals demand in each case). Assume further that a good harvest impacts the world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption.

(i) Discuss the impact of the good harvest on each of the three markets. (6 marks)

(ii) Discuss the effect on the markets for each of the three products if the government implements a price restriction in the sugar cane market with the aim of protecting the farmers. How will this impact the revenues for sugar growers, rum producers and whiskey producers? 

Last month sellers of good Y took in $100 in total revenue on sales of 50 units

Discuss the steps of performing trend analysis on the financial statements of any company.

During the summer of 2018, the owner of the outlet offered a discount of 10 percent ,and sales soared from 700 bottles per month to 1500 bottles per month .The discount was withdrawn subsequently.

This time , to the owner’s dismay ,the sales went up marginally from 700 bottles per month to 800 bottles per month ,and since a reduction in the price had already been announced ,the owner could not revert to the old price soon .He could not reason out as to why the pricing strategy had failed.

You are required to analyze the reason for the failure of the pricing strategy. While analyzing ,the following points should be used.

i)                   Price elasticity of demand during the summer of 2018.

ii)                 Factors that have changed since then.

iii)                The effect of these changed factors on the price elasticity and the resultant new price elasticity.

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Why price and wages are fixed or remain constant or sticky in Keynesian cross model ????

why the cost of producing output increases as the number of labor increases ? because the wage of the labor will be equal to marginal product of that labor hence for deminishing marginal returns the producer have to pay only for the output that the extra unit of labor have produced so how does the cost increase? If for deminishing marginal returns two labors produces one unit of output but as the real wage will be equal to marginal product of labor so each of the labor would be paid for 50% of the value of the output....So how does the cost of production increase with increasing labor input?