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A firm is employing 100 units of labour and 50 units of capital to produce 200 widgets. Labour costs $10 per unit and capital $5 per unit. For the quantities of inputs employed, MP L = 2 and MP K = 5. In this situation, the firm (A) is producing the maximum output possible given the prices and relative productivities of the inputs. (B) could lower its production costs by using more labour and less capital. (C) could increase its output at no extra cost by using more capital and less labour. (D) should use more of both inputs in equal proportions.
Suppose the total utility function of a consumer is given by TU(x) = 2x 2 . What is the marginal utility of X?
Assume the following for price discriminating monopolist aimed at maximizing profit. Total demand for the product of the monopolist is Q = 50-5P (P = 100-2Q) · Demand in Market one is Q1= 32-0.4P1(P1= 80-2.5Q1) · Demand in Market two is Q2= 18-0.1P2(P2= 180-10Q2) · Cost function is C = 50+40Q (where Q = Q1+ Q2) a. Find equilibrium quantities (Q1and Q2), b. Find equilibrium prices (P1and P2), c. Calculate profit (π), d. Calculate and Interpret elasticities (ε1 and ε2)
From the importing country’s point of view, a tariff is better than a quota because a. a tariff has a smaller effect on imports than does a quota. b. a tariff has a larger effect on imports than does a quota. c. the tariff generates tax revenue for the government. d. both reduce imports but only quotas increase price.
A rise in the price of a product lowers the total revenue from the product if the good is an inferior product. demand for the product is inelastic. demand for the product is elastic. income elasticity of demand exceeds 1.
In the market for Fante Kenley, the supply and demand functions respectively are Qs = 0.25P+10 and Qd = -0.5P+100 When there is excess demand, price adjusts according to the equation dp/dt = 0.5 (Qd - Qs) a) Find the long run equilibrium price, P* (that is, the price at which there is no excess demand or supply). b) Formulate and solve he first order differential equation giving P as a function of time, t. Is this market dynamically stable or unstable? c) If the initial price is P = 50, how close will the price be to its long run equilibrium value, when t = 10?
Suppose the demand equation for good Y is given as Q = 50 – 2.5P where Q is the quantity demanded and P is the price. What price would the monopolist set if he had 50 units? How many would he sell? What price would he set if he had 100units? How many would he sell?
The South African government depends on the South African Revenues Services (SARS) for the collection of tax revenue for the ever increasing public expenditure. COVID-19 made all government sof the world over to resort to lockdowns to curb the spread of the disease. The lockdowns have a direct effect of reducing business activities and hence, decrease in revenue collections. Citizens willingness to pay tax largely depends on the perceptions the public have on the tax system, Critically discuss any 7 requirements of a good tax system