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Economics Assignment Two

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29 views2 pages

Economics Assignment Two

Uploaded by

birhanasmamaw67
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Introduction To Economics Assignment

Assignment Two (10%)


1. Briefly discuss the concept of stage of production and which stage of short run production is efficient?
Why?
2. Describe the feature of monopolistic competition that resembles perfect competitive and
the monopolistic market structure.
3. What is the difference between GDP and GNP? Which one is a better measure of the economic
performance of a country
4. Given a short run cost function as TC=1/3Q3-2Q2+60Q+100, find the minimum value of AVC and MC.
5. A firm operates in a perfectly competitive market. The market price of its product is 4 birr and the total
cost function is given by TC=1/3Q3-5Q2+20Q+50, Where TC is the total cost and Q is the level of output.
a) What level of output should the firm produce to maximize its profit?
b) Determine the level of profit at equilibrium.
c) What minimum price is required by the firm to stay in the market?
6. Consider the half population of our country is categorized as follows
Total population-------------------------------------------60,000,000
People outside the labor force---------------------------30,000,000
Frictionally unemployed people-------------------------2,000,000
Structurally unemployed people-------------------------4,000,000
Cyclically unemployed people---------------------------4,000,000
A. Calculate labor force?
B. Calculate the number of employed people?
C. Calculate the rate of unemployment?
D. Calculate the natural level of unemployment rate?
7. If the total cost function of a firm is and the price under perfect
competition is given as birr six. Determine:
a. Find for what values of Q profit will be maximized.
b. Will the firm continue production at that output level?
c. Can firms earn positive profit in the long run? If not why?
d. Can you derive the firm’s supply curve under perfect competition?
8. Suppose the following describes the economy (all figures in billions)
Compensation of employees.................. 3244.20
Proprietor‘s income................................ 402.40
Rental income of persons........................ 6.70
Corporate profits .....................................297.10
Introduction To Economics Assignment

Net interest.............................................. 467.10


Deprecation............................................. 575.70
Indirect business taxes (IBT).................. 469.90
a. What is the value of net domestic product/income at factor cost?
b. What is the value of GDP at market price?
9. Suppose the following describes the economy (all figures in billions)
Transfer Payments................................. $54 Indirect Business Taxes.......................... $74
Interest Income (i)................................. $150 Rental Income (R).................................. $75
Depreciation ..........................................$36 Net Exports....... ..................................... $18
Wages (W)............................................... $67 Net Foreign Factor Income.......... ......... $12
Gross Private Investment....................... $124 Government Purchases.......................... $156
Business Profits (PR).............................. $200 Household Consumption...................... $304
Find GDP using expenditure approach
b. Find GDP using income approach
10. Compare the GDP values obtained using income and expenditure approaches.
Spouses the Statistical Authority in Ethiopia have the following result from the census taken in 1994. The
number of unemployed is 45 billion, employed 20 billion and adult population 50 billion. Find
A. Labor force
B. Unemployment Rate
C. Labor-Force Participation rate
11. Consider the following information for a particular economy.
Total population = 60 million Number of employed = 30 million
Total labor force = 40 million Natural rate of unemployment = 12%
a) Find the total unemployment rate
b) Calculate the cyclical unemployment rate

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