Economics Answers

Project A has a net present value of zero when the discounting factor of 20% is used. How much returns is the project earning?

The total product of the 10 employees of ABC is 10,000 bags . the firm is considering employing a Chinese worker whose marginal product is 900 bags .each bags is sold at K10 and all the workers are paid a flat wage of K8,900

A. What is the average product before and after this workers is employed?

B. Should ABC employ the new Chinese worker?

C. What is the minimum marginal product that ABC can accept for any additional worker under the prevailing price and wage rate?

Walter builds birdhouses. He spends $5 on the materials for each birdhouse. He can build one in 30 minutes. He is semi-retired but earns $8 per hour at the local hardware store. He can sell a birdhouse for $20 each. An accountant would calculate the total cost for one birdhouse to be

A. $5

B. $8

C. $9

D. $13

Prove that the open economy multiplier is the reciprocal of the sum of marginal propensity to save (MPS) and marginal propensity to import (MPM).

The effect of taxes on economic well being is measured comparing the

A. Benefit to buyers with the loss to sellers.

B. Price paid by buyers to the price received by sellers.

C. Profits earned by firms to the losses incurred by consumers.

D. Decrease in total surplus to the increase in revenue raised by the government.

A two sector economy has a total income of rs 150 billion and marginal propensity to consume (MPC) is 66.67%. How much does this economy needed to invest once for all to increase it total income by 100%.

Consider total cost and total revenue given in the following table:

Quantity01234567Total cost$88101113192737Total revenue $08162432404856

a. Calculate profit for each quantity. How much should the firm produce to maximize profut ?

b. Calculate marginal revenue and marginal cost for each quantity. Graph 

them. (Hint: Put the points between whole numbers. For example, the 

marginal cost between 2 and 3 should be graphed at ) At what quantity do these curves cross? How does this relate to your answer to part (a)?

c. Can you tell whether this firm is in a competitive industry? If so, can you 

tell whether the industry is in a long-run equilibrium?

Suppose you have an economy of two individuals’ ad two goods.When is the allocation of goods said to be Pareto Optimal?Thoroughly illustrate and explain the concept of optimality using an Edgeworth box.Economists often argue that a trade-off exists between efficiency and equity, with reference to the Edgeworth box used in 2 support these claims.For resource allocation to be deemed efficient within an economy, three conditions must be meet. State and explain these three conditions.

Multichoice company broadcasts to subscribers in Lusaka and Solwezi. The demand for each of these two groups are QSZ = 50 – (1/3) PSZ and QLSK = 80 – (2/3) PLSK, where Q is in thousands of subscriptions per year and P is the subscription price per year. The cost of providing Q units of service is given by C (Q) = 1000 + 30Q, where Q = QSZ + QLSK. Assuming Multichoice is a Monopoly and can engage in third-price discrimination, thenWhat is the profit-maximizing price and quantity in Solwezi Market?What is the profit-maximizing price and quantity in Lusaka Market?Suppose the Monopoly can only charge a single. What price should it charge and what is the total quantity sold?

Kanoso is the sole owner of a nail salon. Her costs for a manicure are given byTC = 10 + Q2 Where TC is the Total Cost and Q is the number of manicures.The nail salon is open only 2 days a week – Tuesday and Thursday. On both days Kanoso acts as a price taker, but price is much higher on Tuesday. Specifically, P = K10 on Tuesday and P = K20 on Thursday.Calculate how many manicures Kanoso will perform on each day.Calculate Kanoso profits on each day.The National Association of Nail Salons has proposed a uniform pricing for all its members. They must always charge P=K15 to avoid the claim that consumers are being ripped off on Thursday. Should Kanoso join the association and adhere to pricing regulations? (Quantitatively justify your answer)