explain the following: (5 marks) Normative economics VS Positive economics

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explain the following: (5 marks)
Normative economics VS Positive economics

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Assume you are the manager of a small South African firm which sells nails, identical to those supplied by many other firms. You are concerned about two eventualities: • That the overall market supply of nails will decrease by 2 percent due to foreign producers’ exit • That the overall market demand for nails will increase by 2 percent due to a growing economy. 2.1 Identify and justify the firm’s market structure. (5) 2.2 With the aid of a diagram, illustrate and explain the firm’s long-run equilibrium position. (10) 2.3 The schedule below shows the quantities of nails demanded at each price: Price Quantity Old 400 10000 New 380 12000 2.3.1 Calculate the elasticities of demand, using the point method and interpret your result. (6) 2.3.2 List any four (4) factors that could result in the nails having the elasticity calculated in 2.3.1
A worldwide cosmetic company can upgrade the quality of one of its products by purchasing new equipment at a cost of k240,000. The new equipment would replace old equipment that has a current market value of k80,000. The old equipment originally cost k150,000 three years ago and is been depreciated over it’s 15 year life on a straight line basis to zero salvage value. New equipment has an expected life of 12 years . It’s salvage value is estimated at k30,000. By upgrading the quality of this product, the company would be able to increase sales price. As a result, the operating income before tax will increase by k10,000 per year over its 12 year life. The company’s tax rate is 40% and it’s cost of capital after tax is 15%. Compute the Net present value and the internal rate of return for the investment.
THE FOLLOWING TABLE SHOWS THE TOTAL UTILITY GAINED FROM THE CONSUMPTION OFFANTA LEMON IN A WEEK.LEFT IS QUANTITY AND RIGHT IS TOTAL UTILITY1-202-353-454-535-586-587-48 1. CALCULATE THE MARGINAL UTILITY. WHAT DO YOU OBSERVE?2. SKETCH THE TOTAL UTILITY AND MARGINAL UTILITY CURVES.3. IF THE PRICE OF FANTA LEMON INCREASES FROM RS.8 TO RS.10, HOW WILL ITAFFECT ITS CONSUMPTION?EXPLAIN YOUR ANSWER USING THE DATA ABOVE.
The Latin phrase ceteris paribus means that when a relationship between two variables is being studied (A) both are treated as unpredictable. (B) neither of those two variables is allowed to change. (C) all other variables are held fixed. (D) we recognize that some factors are unknown.
Suppose the total utility function of a consumer is given by TU(x) = 2x 2 . What is the marginal utility of X? With step
Demand and supply ( the diagrams) market equilibrium
A firm’s production function is QQ = 2LL2KK3. a) Write an expression for the marginal product of labor. b) Write an expression for the marginal product of capital. c) Write an expression for the marginal rate of technical substitution of labor for capital.
Suppose that the consumer has a demand function of the milk from X1=10+(m/10p1) originally his income was 120 per week and the price of milk was 3 per unit What is the demand of the milk per week suppose that the price of milk falls 22 pioneer what is the demand at his new price of milk per week what is the total change in demand in a week Calculate the substitution effect and income effect after this change in price