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Suppose economy is in equilibrium at point E, Now if for some reasons there is shortage or surplus in economy, how an economy will again attain equilibrium. Explain with the help of an example
You have agreed to make investment in your friends agricultural farm. This would require an amount of $20,000 as initial investment on your part. Your friend promises you revenue (before expenses) of $3600 per year the first year and thereafter the revenue increases by $200 per year. Your share of the estimated annual expenses is $1000. You are planning to invest for six years. Your friend has made the commitment to buyout your share of the business at that time for $24000. You have decided to set a personal MARR of 15% per year. Judge the profitability of the investment project by using Future Worth (FW) method.
Suppose the production function of an economy is given by:
Y = A̅K3/4 L1/4
A. Prove the production function is a homogeneous and follows a constant returns to scale.
Interpret the nature of production function.
B. Create a table and find out what are the five equations and five unknowns based on table-
that is reported in your text (pp.).
C. Solve these equations to get the solution to the model. Put your solution in the form of a Table
and explain the hiring rule of labor and capital based on graph of factor market equilibrium.
D. Estimate for the output per person in the long-run. Show it graphically. Explain why it follows
diminishing returns to scale.
E. Estimate TFP in the long-run, and explain TFP growth is crucial to make differences among
countries in terms of per capita GDP.
F. Point out the limitation of this model to explain long-run economic growth.
Researcher is using data for a sample of 10 observations to estimate the
relation between consumption expenditure and income. Preliminary analysis
of the sample data produces the following data. (20%)
Y=B+B,X +6,, i=l.
Y=20
2X =100
-r-nFY = 850
x'-x -nXX = 1000
y-XY - nY = 700
- 10,= 2
Hint: the t-value (critical value) of 59% (0.05) =2.306 or -2.603
A, compute OLS estimates of A, and B, and interpret it.
B, calculate the variance and standard deviation of p and B,.
C, Compute the value ofR (coefficient of determination) and interpret the
result.
D, Compute 95% confidence interval for the B, and .
E, Test the significance of the ,.and B, parameter at 5% level of confidence
using t-test
Suppose that a Demand Curve is given by QY = 10 – 5PY + PX Where QY is the quantity of the good, PY is the price of the good and PX pertains to the price of a substitutable good. The price of the substitutable good is K2. Suppose the price of the good is K1. Find the own price elasticity of demand? Find the cross-price elasticity of demand?
Using the supply function, you can get the quantity supplied if there is a
given price. Substitute the peso price in variable P and Multiply it by slope +10, the
available answer will be added to 0 (intercept). From here you will get the answer
10 quantity supplied. In the second example, the price of 5 is multiplied by 10. The
quantity supplied is 50.
if the price is higher than the origin what happened to the changes of quantity supply and quantity demand?
How to discuss a equilibrium reason?
Briefly explain the three (3) basic assumptions of indifference curves.
ABC has employees 300 workers as a team. Standard production of 800 pieces per hour. Each employee in the team is paid a bonus for the excess production in addition to wages at hourly rates.
The bonus= % of production more than the standard quantity is found. Five % is regarded as the employees share. The employee in the team is paid as a bonus this percentage of a wage rate of $30 per hours.
Total hours worked= 2100
Total Production=2700000
During the week Paul worked 40 hours and was paid $20 per hour. Margaret also worked 40 hours and was paid $20.
Calculate
The bonus rate for the week
Total bonus for the Team
Total pay for Paul and Margaret.
