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ecomomics paper 1 ???
- Thread starter xenvox
- Start date
A farmer can produce both beef and lamb. The opportunity cost of a kilo of beef is three kilos of
lamb. The price of a kilo of beef is twice that of lamb.
What should he do if his aim is to maximise his revenue?
A concentrate on beef production
B concentrate on lamb production
C produce beef and lamb in the ratio 3:2
D produce twice as much beef as lamb
lamb. The price of a kilo of beef is twice that of lamb.
What should he do if his aim is to maximise his revenue?
A concentrate on beef production
B concentrate on lamb production
C produce beef and lamb in the ratio 3:2
D produce twice as much beef as lamb
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Man the first question really is confusing!!!
I would've done A for sure but then the answer is B...I don't get it...
For the second question, i think the answer is B.
I would've done A for sure but then the answer is B...I don't get it...
For the second question, i think the answer is B.
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mohsinsrk said:
Well there is slight difference between devaluation and depreciation even though they are used interchangeably. In general, devaluation is associated with a fixed exchange rate and occurs when a country takes a deliberate/conscious decision to lower exchange rate. While depreciation is mainly associated with a floating exchange rate and occurs when the exchange rate is lowered due to changes in market demand and supply.
hope that helps....
11 The output of Firm X depends not only on the quantities of factors of production employed by Firm
X. It also depends directly on the level of output of Firm Y.
What does this illustrate?
A complementary goods
B cross-elasticity of demand
C an externality
D joint production
Can anyone explain why the answer is C with examples??? PLZZZZZ! THIS MCQ IS VERY CONFUSING
X. It also depends directly on the level of output of Firm Y.
What does this illustrate?
A complementary goods
B cross-elasticity of demand
C an externality
D joint production
Can anyone explain why the answer is C with examples??? PLZZZZZ! THIS MCQ IS VERY CONFUSING
Sijan92 said:
IT CANT BE COMPLEMENTARY AS ITS JOINTLY DEMANDED
ANSWER WOULD LIKELY BE D.. AS GOOD X AND Y ARE JOINTLY SUPPLIED OR PRODUCE..E.G Some products or production processes have more than one use. For instance, cows can both provide milk and be eaten. If farmers increase the number of cows they own in response to an increase in DEMAND for milk, they are also likely to increase, a little later, the supply of meat, causing beef prices to fall."
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mohsinsrk said:
ans wud b B coz in floatin exchange rate we cant devalue our currency ourself..... it is automatically fixed by d demand and supply intersection
@sijan after discussing the problem with my seniors and teachers i came on conclusion that....externality is basically effect to third party or effect borne to those indirectly involve in production or consumption of a particular product...where as jointly produce goods are jointly supplied....situation is that firm y is affecting output of firm x..which is according to the difination of externalities...however i am still confuse between c and d.......required an expert opnion here......Sijan92 said:
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In the absence of off-setting changes, what would be the effect of an appreciation in a country\s exchange rate?
a. an increase in the cost of imported raw materials
b. an increase in the level of unemployement
c. an incresae in the rate of inflation
d. an increase in the volume of manufacturing exports
hepl!!!
a. an increase in the cost of imported raw materials
b. an increase in the level of unemployement
c. an incresae in the rate of inflation
d. an increase in the volume of manufacturing exports
hepl!!!
mohsinsrk said:
welll the truth avbout such questions is not just that theyre scary, theyre also very common.
aLtho i havnt even started preparing properly for p1 and im not extremely sure of how 2 xplain this but leme giv it a shot )
if he produces ONE kilo of beef, he loses THREE kilos of lamb
However, when he sells that ONE kilo of beef, he just gets back the revenue equal to selling TWO kilos of lamb.
So, hes losong out on revenue.
Because by producin ONE beef, he losews THREE lamb. But when he sells, he gets back revenue worth only TWO lambs. meaning producing beef is not even EQUAL to producing lamb. Hence he shud concentrate on producing lamb.
i hope dat helps :Rose:
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Sijan92 said:
yes da answer is B, but can u plz explain me y u answered B? :shock:
Sijan92 said:
yes for sure
if the steel mill is working with negative externality of bad health, then the individuals that live around the mill will be willing to pay up to the cost that they are incurring from health care....thus production of hospital directly depends on the production of steel mill....
if steel mill isn't working than hospital may not get enough customers....
Hope u understand....