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Explain the concept of elasticity and describe why the supply of petrol in the short run is relatively inelastic.
What are the advantages of leaving resource allocation to price allocation? Ans) The 5 benefits are Neutral, Flexible, Freedom of choice, No administrative cost and lastly Dimin
What causes a supply curve to shift? a. Changes into Input Prices An input is a good which is used to generate another good. b. Changes into Technology c. Chang
how does government regulate externalies
Suppose a company is considering two investment projects. Both projects require an upfront expenditure of $30 million. The company estimates that the cost of capital is 10% and tha
How can we determine fixed exchange rate If a nation has a fixed exchange rate (say against a specific currency), the government or central bank may change this fixed exchange
The price and quantity of lumber and other building materials has gone up recently. Show graphically and explain what might have caused this.
DETERMINATION OF FACTOR PRICES BY SUPPLY AND DEMAND Let us suppose that perfect competition prevails in the goods and the factor markets. In such a situation let us see how th
What is the size of the labor force if the unemployment rate is 6%, the population is 300 million, and the number unemployed is 6 million
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Question 3 (44 marks) Please note that this question requires substantial research. A summary from the text book is not sufficient. To score well you will have to consult several a
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