ecomomics paper 1 ???

[Sijan92]

Yea got it. Thanks a lot!

 

[Sijan92]

5 What is not held constant when aggregating individual firms’ supply curves to give the market
supply curve?
A the number of firms in the industry
B the price of the product
C the prices of factors of production
D the state of technology

Can anyone explain why B is the correct answer???

 

[Sameeer]

yes becoz inorder to make a relation between price and supply we dont assume price same ...

if we aassume it same then how come supply curve could be made using price constant.

Hope u got my point.

 

[Sijan92]

No bro. Could you elaborate a bit with examples??

 

[Sameeer]

it is too simple you CANNOT draw an aggregate supply curve without price....

but u can draw suppl curve by assuming other option constant such as technology....

hope u understood

 

[Sijan92]

Yeah. Got it now. Thanks

 

[Sijan92]

15 Correct use of cost-benefit analysis should produce an outcome where
A social costs are minimised and social benefits are maximised.
B social benefits are in excess of social costs.
C marginal private benefits equal marginal social benefits.
D marginal social benefits equal marginal social costs.

Any idea why the answer is D? :/

 

[Sameeer]

d is right answer ...

inorder to produce socially optimum level msb =msc...

 

[Sijan92]

Thanks agaIN really appreciate it..

 

[Sameeer]

any tym...

 

[UncrownedKing]

HOW COUNTRY WITH FREE FLOATING EXCHANGE RATE COULD IMPROVE ITS BALANCE OF PAYEMENT.
A)DEVALUE ITS CURRENCY
B)INCREASE TAXES
C)REDUCE SUBSIDIES
D)FALL ITS EXPORTS
I AM CONFUSE BETWEEN OPTION A AND B.....IN MARKING SCHEME ANSWER IS B...???

it is B mate..because since its a Free floating exchange rate..the govt. cant devalue the currency.. and increasing taxes would reduce disposible income,which would inturn reduce the demand for imported goods

 

[UncrownedKing]

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!!!

the answer is B..because..rise in the value of currency leads to(from here on referred to as ">") increase in demand for imported goods>decrease in demand of local goods>decrease in production>workers will get laid off..therefore,the level of unemployment will fall

 

[UncrownedKing]

5 What is not held constant when aggregating individual firms’ supply curves to give the market
supply curve?
A the number of firms in the industry
B the price of the product
C the prices of factors of production
D the state of technology

Can anyone explain why B is the correct answer???

B is the correct answer because when we calculate the supply schedule we dont keep the price constant. instead we predict how much quantity would be supplied at different price levels

 

[akbararshad]

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!!!

the answer is B..because..rise in the value of currency leads to(from here on referred to as ">") increase in demand for imported goods>decrease in demand of local goods>decrease in production>workers will get laid off..therefore,the level of unemployment will fall

dude, dre is a confusion.... like wen exchange rate appreciates, imports get expensive and exports get cheaper in the foreign market so how come da demand for imported goods increases with the appreciation in the country's exchnage rate?

 

[Xenon]

dude, dre is a confusion.... like wen exchange rate appreciates, imports get expensive and exports get cheaper in the foreign market so how come da demand for imported goods increases with the appreciation in the country's exchnage rate?

appreciation >>> exports become expensive, import becomes cheaper
decpreciation >>> exports become cheap, import becomes expensive