Economics Answers

• Consider an economy described as follows: Y 5 C 1 I 1 G. Y 5 8,000. G 5 2,500. T 5 2,000. C 5 1000 1 2/3(Y2T ). I 5 1,200 2 100r. a. In this economy, compute private saving, public saving, and national saving. b. Find the equilibrium interest rate. c. Now suppose that G is reduced by 500. Compute private saving, public saving, and national saving. d. Find the new equilibrium interest rate

Following are the demand and supply function of a market

QDA = 8000 - 1000Px, QSA= - 4000+2000Px

i) Find out the market clearing price and quantity.

ii) Plot, on one set of axes, the market demand curve and the market supply curve for commodity A and show the equilibrium point.

iii) Is the equilibrium stable? Explain.

Economy plays a vital role in controlling stock prices. If so how?

When developing LTSM, both the needs of the educator and the learner needs to be taken into consideration. Why do you think this is so?

An equipment costing 5, 000, 000 can be sold for 1, 000, 000 after it’s useful life of five years. What will be the book value of the said equipment if the company plans to sell it the end of 3 years? Use the sum of years digit method.

An asset has it original value of 120, 000 pesos has a salvage value of 3% of its original value in 12 years. What is the asset’s value after 8 years of use? Use straight line depreciation method.

Equipment costing 2,000,000 with a 200,000 annual operation and maintenance cost. Determine the capitalized cost if money is worth 20% per year.

Suppose that market demand can be represented as p = 100 - 2Q. There are 10 identical firms producing an undifferentiated product, each with the total cost function TC = 50 + q

2

q2

. Compare the competitive outcome with the cartel outcome. What is the individual firm's incentive to cheat on the cartel?

Assume in a two-sector economy made up of agriculture and manufacturing, the government

introduces a subsidy of y per hour on labour in the manufacturing sector. What will be the

effect of the policy on the equilibrium wage, total employment as well as employment in

agriculture and manufacturing?

Consider the following scenarios, state and explain the type of inflation it is associated with.

i. If inflation increases because of the large increase in the price of oil.

ii. If inflation increases after a large increase in government spending.