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Discussion in 'CIE' started by asadmehmood, Oct 2, 2011.
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HELPP with profit maximization... okei so we all agree that the optimum point of production of a good is where MC=MR. Now take for instance that i own a factory and make pens. I have one machine that allows me to produce 100 pens. And I sell them all so I decide It is time to go full economy of scale and buy another machine which costs me, say $200.
The price of my pens when I had one machine was $1 each and they costed me say $ 0.5 but now that I want to produce 101 pens, that pen number 101 costs me $200 right? that means that marginal cost for producing one more pen is $250-$50 which is $200.
According to MC=MR the profit I have to make from each pen is $200 because that is what costed me produce one more pen?
1. If a firm produces capital and consumer goods, then it went from its current point on the PPC to a point where it produces less of capital goods and more of consumer goods, what is the most likely position of the PPC in the future?
A. Can produce same amount of capital good, but less consumer goods.
B. PPC shifts inward, producing less of both.
C. Can produce less amount of capital good, but more of consumer good. (PPC inverted shift)
D. PPC shifts rightward, being able to produce more of both.
2. A firm is considering whether to buy a piece of capital equipment which will cost 2000$. It estimates that the equipment will last for two years. The alternative is to lend the money to a finance company at a compound rate of interest of 5%.
What is the minimum increase in revenue the firm must expect to make it worthwhile buying the equipment?
3. As a result of a free trade agreement, toys produced in Africa can be supplied to European markets. These toys are much cheaper than similar toys produced in Europe but are not of such good quality. What will happen in Europe to "expenditure on toys", "employment in European toy companies" and "imports from Africa"?
A. *Expenditure Decreases, *Employment Decreases, *Imports Decreases
B. *Expenditure Increases, *Employment Decreases, *imports Uncertain
C. '' Increase, '' Uncertain, '' Increase
D. '' Uncertain, '' Uncertain, ''Increase
All ECONIMICS pastpapers
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Hello, sir. You can count me in too, as one of your students. I have a question I'm stuck at. Could you just explain me what to do.(like what points to write about and so on)
Q: Explain about two policies government may introduce to get rid of externalities.
Thank you very much. My e-mail ID is [email protected]
I dont really enjoy econ
Can you help me in answering this question which in the May/June 2013 paper 2 code 2281/22. Q. Discuss to what extent supply side policies are likely to be more effective than monetary policies in stimulating the economic growth . (10 marks) Your help is greatly appreciated .... Thank you in advance ....
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hussain777 Hey all. Please help me put with this essay : discuss the ways in which a government might influence private investment in order to try to ensure sufficient economic growth in a country.
thanks in advaned
Interest is the return of savings. This mean people would earn more if they save more. Since disposable income can either be spend or saved, more spending i.e. consumption would have a cost in terms of high monetary returns through saving which would be foregone hence its opportunity cost.
you can get some good economics notes at www.gcebuddy.wordpress.com/economics
Please correct me if wrong
Qamar boloch or red spot ? Sir
im using redspot its fine and nice description at the back though it got some mistakes wrong ans too).. Never used qamar baloch..
Discuss whether the law of diminishing returns contradicts the concept of economies of scale.?? alevels
can any one help with its ans..?
Separate names with a comma.