Economics Answers

Which one of the following is one of the ways through which the South African government is using to reduce the problem of high unemployment among youths

How does loss provision affect financial institution's capital and share price?

Rick always likes to consume a cup of tea with a serving of noodles at any given time of the day. He earns a monthly allowance of 150. A cup of tea cost him Rs5 and serving of noodles cost Rs 10. Given this what will be Rick’s optimal consumption bundle?

Question 3 (20)

Capital (k) MPK (Marginal Product of

Labour (L)

(6) (4)

  MPL (Marginal Product of Labour)

1 24 1 11 2 21 2 9

3 18 3 8

4 15 4 7 5956 6664 7371

8 1 8 0.5

Hint: MP = ∆TPP/∆Q

Least cost combination:

Profit maximising combination:

Capital) 0-0-

MRP =∆TR/∆Q = MRP*P

Use the information from the Table above. In a perfectly competitive market, capital costs N$3 per unit and labour costs N$1 per unit. Product price is N$1.

a) What is the least cost combination of labour and capital the firm should use for producing 80 units of output?

b) What is the profit-maximizing combination of labour and capital?

c) What is the level of output?

d) What is the economic profit?

e) Is this the least costly way to produce the profit maximizing output? (product price is N$1) 

A major farming company is planning to purchase new tractors. It wants to borrow $650 million by issuing bonds. The bonds are for a 12-year period with simple interest computed quarterly at a rate of 10 percent per year. Interest is to be paid each quarter to bondholders. How much will the airline have to pay it. quarterly interest? How much interest will it pay in the 12-year period?