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1. What are the main assumptions of perfect competition? In a monopoly, if a firm fixes the price, what determines the amount supplied?
How has the government helped small firms? How do small firms benefit an economy? What is a market?
1. Give an example of a trading economy of scale. Give two examples of diseconomies of scale. Why has the small-firm sector of the economy grown?
1. Who investigates mergers and takeovers? Suggest three reasons for vertical integration. Distinguish between internal and external economies of scale.
1. In what time period are all factors of production variable? What is technical efficiency? Why do diminishing returns occur in the short run?
What is the term for pricing where a mark-up is added to the costs of production? What are the main characteristics of a not-for-profit organization?
1. What is abnormal profit? Where is profit maximized? What profit is made when average cost equals average revenue?
What mainly causes the price instability of agricultural goods? How can producers attempt to overcome the problems that the cobweb theory illustrates?
What effect will higher wages have on the supply curve? What is the difference between a ‘real' price and a ‘normal' price? When does excess supply occur?
1. Describe the shape of the short-run supply curve. What is the shape of the supply curve called? Which factors affect the elasticity of supply?
How would you classify a good with high positive income elasticity? What is the difference between a shift in demand and an expansion of demand?
The price of a good falls by 10 per cent but the quantity demanded increases from 100 to 120 units. Calculate the price elasticity of demand.
Describe the shape of a typical demand curve. What are ‘inferior' goods? How does a ‘consumer surplus' arise?
What are the main factors causing economic growth? What types of policy can be used to promote economic growth?
What are the main production decisions which have to be made? What does a production possibility curve show? What are the main justifications for the profit?
Why is a choice made when resources are allocated? What is the difference between a need and a want? What role does government play in a market economy?
If he is looking to invest his $100,000 where he can get an inflation adjusted of 12%, what minimum rate of interest he should shop for?
If the transportation company has MARR of 15%, which of the buses if any should the company buy? Use the ROR method.
If the MARR of this investor is 10%, which one of the projects if any should he accept? Use the NPW method.
Should they build a 4-lane or a 2-lane or a 2-lane highway? Perform the financial analysis using the rate of return method.
If Mr X can only put down $33M but his bank will extend him a loan for the rest. Why would you advise him to take the loan and invest? Yes? No? Why? Explain.
Another model of the equipment with the same initial price and annual cost brings in an income of $1,100 per month. What is the rate of return for this project?
Calculate and plot the cash flow diagram for this project and calculate the before- and after-tax NPW.
The group will pay you $2,000 to make a recommendation based on sound economic analysis. What is your recommendation and why?
A plate forming machine was purchased four years ago at $100,000. The owner used a 10-year straight-line depreciation. What is his opportunity cost?