Category: Economics

Bond Prices and Interest
Economists argue that bond prices and interest rates are inversely related. On a piece of notebook paper, please use the following scenario to answer the questions. The government offers a $1,000.00 bond, paying 10% interest, for a period of one year. Show all work.
a. Please calculate the interest income for this bond.
b. Please determine the price of the bond in the secondary market, if prevailing interest rates fell from 10% to 9.5%. (hint: remember, the bond face value, interest, and maturity date cannot change, so when this bond purchaser remits the bond to the government, they will still be paid your response from number one)
c. Create an idealized bond and money market model to show this relationship. Describe the outcomes.
d. Starting from the original scenario, please calculate the price of this bond in the secondary market if the prevailing interest rate climbed from 10% to 10.5%.
e. Create an idealized bond and money market model to show the relationship from the scenario in (d). Describe the outcomes.

The identified research problem in this study can be classified into three dimensions. The first dimension is linked to the practical problem prompting the need for diversification.Secondly, the problem is also linked to the identified inconsistency regarding the Tourism-led Growth Hypothesis (TLGH) based on findings by contemporary empirical studies in literature. With regards to this, the Tourism-Led Growth Hypothesis (TLGH) postulates that more resources should be allocated to the tourism industry relative to other sectors in order to accelerate economic growth rates (Terzi, 2015). Furthermore, the third dimension of the research problem is linked to the identified gap in empirical literature based on the phenomenon that even though many studies have investigated the impact of tourism on economic growth, none of the studies have considered investigating the impact of the interaction between the tourism sector and other sectors such as the travel services sector on economic growth. tate the possible research topic and identify THREE (3) possible regressors based on the narrative above.

OUESTION 2(20)2.1
Assume that ESKOM is the sole provider of electricity in South Africa. To meet the monthly demand for electricity in the country, which is represented by the estimated inverse demand function P=1200-4Q. the utility company has set up two electric generating facilities: QK kilowatts are produced at Kusile facility (K) and QM kilowatts are produced at Matimba facility (M). The total output therefore is Q=QK QM The costs of producing electricity at each facility are estimated as CK(QK)=8000 6QK2 and CM(QM)= 6000 3QM2. Determine the profit-maximising amounts of electricity to produce at the two facilities, the optimal price and the utility company’s profits.
2.2
The table below provides information for three firms that enjoy market power such that the marginal revenue (MR) for each of the firms can be represented by the expression: MR=P[1 εlonpεlonp], where P= price of the product, and εlonp= own price elasticity of demand for the firm’s product. MC is the marginal cost.
[[Season,Firm],[Groceries store,Clothing shop,Photocopying shop],[MC,εlonp,MC,εlonp,MC,εlonp]]

L7-P2: (5 pt) Calculate the MPS row values, when assumptions are: Min Lot size, MLS \( =30 \) [pcs], Min unit of production, MUP \( =5 \) [pcs], Safety Stock SS = 20; begin{tabular}{|l|l|l|l|l|l|l|l|l|} hline multirow{2}{*}{} & multicolumn{2}{|c|}{} & 1 & 2 & 3 & 4 & 5 & 6 \ hline & Week & 22 & 23 & 24 & 25 & 26 & 27 & 28 \ hline Forecasted Demand by Weeks & FD & 14 & 15 & 24 & 15 & 18 & 16 & 15 \ hline Customer Orders & CO & 6 & 23 & 19 & 20 & 16 & 11 & 16 \ hline Projected on hand inventory & POH & 20 & & & & & & \ hline Safety Stock & SS & 20 & & & & & & \ hline Net Requirements & NR & & & & & & & \ hline Master Production Schedule & MPS & & & & & & & \ hline end{tabular} Answers write in above table.
1
2
3
4
5
6
Week
22
23
24
25
26
27
28
Forecasted Demand by Weeks
FD
14
15
24
15
18
16
15
Customer Orders
CO
6
23
19
20
16
11
16
Projected on hand inventory
POH
20
Safety Stock
SS
20
Net Requirements
NR
Master Production Schedule
MPS

The diagram below represents the market for fire extinguishers. Use the diagram to illustrate the areas of consumer surplus and producer surplus generated in this market.
Instructions: Use the tool provided ‘CS’ to identify the area of consumer surplus. This will drop a small triangle with three endpoints onto the graph. Drag the endpoints to the appropriate positions to identify the area of consumer surplus. Then use the tool provided ‘PS’ and follow the same procedure for producer surplus.
Tools: CS, PS
Legend: Demand, Supply
Market for Fire Extinguishers

Match the following explanations of terms and concepts appropriately.
The market demand curve equals the vertical sum of exch consumer’s demand for that good. The efficient level is where the market derrand curve intersects the marginal cost curve = that is, where the sum of the marginal valuations equal the marginal cost.
The free-rider problem occurs because people try to beneftif from public goods ◻ without paying for them. Taveng people according to their marginal valuations of the public good may be efficient, but it may not be fair if the ablity to pay differs. Thus. public goods are more complicated than private goods in terms of what goods should be provided, in what quantities and who should pay.
A stance adopted by voters who tind that the cost of understanding and voting on a ◻ particular issue usually exceeds the expected beneft of doing so.
Al morket activity that goes unreponted to the government either to avoid tawes or ◻ because the activity
These are goverment departments and agencies churged with implementing