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Importance of estimation of National Income of a country:
1. Planning and decision making; forecasting etc.
2. Measure of economic performance and Comparison
3. Policy formulation and implementation
4. Property ownership – determination of the size of private foreign direct investment (FDI)
Problems of measurement of National Income:
1. Incomplete/Inadequate information
2. Double counting
3. Changes in prices
4. The problem of inclusion, in terms of:
- Subsistence output (income)
- Intermediate goods
- Housing i.e. rent on owner – occupiers
- Public Services provided by the government
- Foreign payments i.e. net income from abroad
- Illegal activities eg. smuggled output
- Revaluation of assets.
Wilfykil answered the question on February 6, 2019 at 10:50
- Assume the following information represents the National Income Model of an "Utopian" economy.Y = C + I + GC = a + b(Y – T)T...(Solved)
Assume the following information represents the National Income Model of an „Utopian? economy.
Y = C + I + G
C = a + b(Y – T)
T = d + tY
I = IO
G = GO
Where a > O; O < b < 1
d > O; O < t < 1
T = Taxes
I = Investment
G = Government Expenditure
Find the equilibrium values of income, consumption and taxes.
Date posted: February 6, 2019. Answers (1)
- Assume the following information represents the National Income Model of an "Utopian" economy.Y = C + I + GC = a + b(Y – T)T...(Solved)
Assume the following information represents the National Income Model of an „Utopian? economy.
Y = C + I + G
C = a + b(Y – T)
T = d + tY
I = IO
G = GO
Where a > O; O < b < 1
d > O; O < t < 1
T = Taxes
I = Investment
G = Government Expenditure
Explain the economic interpretation of the parameters a,b,d and t.
Date posted: February 6, 2019. Answers (1)
- The total cost equation in the production of bacon at some hypothetical factory is
C = 1000 + 100Q – 15Q2 + Q3
Where C = Cost...(Solved)
The total cost equation in the production of bacon at some hypothetical factory is
C = 1000 + 100Q – 15Q2 + Q3
Where C = Cost measured in shillings, while Q = quantity measured in kilograms
What is the Marginal cost of the 12th Kilogram?
Date posted: February 6, 2019. Answers (1)
- The total cost equation in the production of bacon at some hypothetical factory is
C = 1000 + 100Q – 15Q2 + Q3
Where C = Cost...(Solved)
The total cost equation in the production of bacon at some hypothetical factory is
C = 1000 + 100Q – 15Q2 + Q3
Where C = Cost measured in shillings, while Q = quantity measured in kilograms.
Compute the total and average costs at output level of 10 and 11 kilograms.
Date posted: February 6, 2019. Answers (1)
- Discuss some of the economic implications of a rising trend in the rural-urban migration and offer
policy recommendations to reverse it.(Solved)
Discuss some of the economic implications of a rising trend in the rural-urban migration and offer
policy recommendations to reverse it.
Date posted: February 6, 2019. Answers (1)
- Briefly explain and illustrate quasi-rent.(Solved)
Briefly explain and illustrate quasi-rent.
Date posted: February 6, 2019. Answers (1)
- Using well labelled diagrams, illustrate cases when the total factor payments may equal to economic rent,
or transfer earnings or shared between the two.(Solved)
Using well labelled diagrams, illustrate cases when the total factor payments may equal to economic rent,
or transfer earnings or shared between the two.
Date posted: February 6, 2019. Answers (1)
- Explain what is meant by the terms transfer earnings and economic rent of a factor of production(Solved)
Explain what is meant by the terms transfer earnings and economic rent of a factor of production
Date posted: February 6, 2019. Answers (1)
- A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 +...(Solved)
A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 + 4Q and the total fixed cost is 4.
Determine the output level at the break-even point.
Date posted: February 6, 2019. Answers (1)
- A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 +...(Solved)
A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 + 4Q and the total fixed cost is 4.
Determine the level of super-normal profit if any.
Date posted: February 6, 2019. Answers (1)
- A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 +...(Solved)
A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 + 4Q and the total fixed cost is 4.
Determine the profit maximizing output.
Date posted: February 6, 2019. Answers (1)
- Illustrate and explain the short-run supply curve of a firm in perfect competition(Solved)
Illustrate and explain the short-run supply curve of a firm in perfect competition
Date posted: February 6, 2019. Answers (1)
- Explain why a firm in perfect competition may continue in the production of goods which it
can only sell at a loss and why it cannot...(Solved)
Explain why a firm in perfect competition may continue in the production of goods which it
can only sell at a loss and why it cannot continue doing this indefinitely
Date posted: February 6, 2019. Answers (1)
- Differentiate between economies of scale and returns to scale(Solved)
Differentiate between economies of scale and returns to scale
Date posted: February 6, 2019. Answers (1)
- Write explanatory notes on the various types of internal and external economies of scale.(Solved)
Write explanatory notes on the various types of internal and external economies of scale.
Date posted: February 6, 2019. Answers (1)
- What is meant by economies and dis-economies of scale?(Solved)
What is meant by economies and dis-economies of scale?
Date posted: February 6, 2019. Answers (1)
- Using a well-illustrated diagram, show that a monopolist can make losses in the short-run even
when MC = MR(Solved)
Using a well-illustrated diagram, show that a monopolist can make losses in the short-run even
when MC = MR
Date posted: February 6, 2019. Answers (1)
- Using a well illustrated diagram, explain why prices are "sticky" downwards under an
oligopolistic market structure(Solved)
Using a well illustrated diagram, explain why prices are "sticky" downwards under an
oligopolistic market structure
Date posted: February 6, 2019. Answers (1)
- What is "Oligopoly"?(Solved)
What is "Oligopoly"?
Date posted: February 6, 2019. Answers (1)
- What key assumptions underlie the law of variable proportions?(Solved)
What key assumptions underlie the law of variable proportions?
Date posted: February 6, 2019. Answers (1)