Economics, Accounting & Business: Post your doubts here!

[mimiswift]

A worker can make 10 hats or 5 pairs of shoes in a day. In the market three hats can be sold at
the same price as two pairs of shoes.
The worker should make
A 4 hats and 3 pairs of shoes daily.
B 6 hats and 2 pairs of shoes daily.
C hats only.
D shoes only.
Explain?

Answer is C

worker can make more hats than shoes in a given time the price of say 3hat/2shoes is $5....so what the workers revenue :-for hats its(10/3*5=$16.67) and shoes its(5/2*5=$12.25) so he earns more with hats so he should make hats only!

 

[mimiswift]

thnx a lot got it!!!

Your welcome!

 

[mimiswift]

yes, right.

then why is the value measured in dollars falling?

 

[mimiswift]

29 Other things being equal, what will happen if a British company raises the sterling (£) price of
goods it sells to Pakistan by the full extent of a depreciation of sterling against the Pakistan
rupee?
A The demand for the company’s goods will fall in Pakistan.
B The company’s earnings in Pakistan will remain constant in pounds sterling.
C The company’s earnings in Pakistan will remain constant in Pakistan rupees.
D The profit margin on sales to Pakistan will decline.
correct answer is c
please explain
thankyou

even i don't understand
can someone please explain!

 

[00mfr]

even i don't understand
can someone please explain!

i know how to do it but not to sure on how to explain it but anyways heres a try,
the answer is basically in the question, u just hav to understand the terminology.
the rice in price (sterling) is cancelled out by the depreciation of this currency against rupees, therefor evrything remains constant.
dont hate the bad explanation sorry

 

[student92]

i know how to do it but not to sure on how to explain it but anyways heres a try,
the answer is basically in the question, u just hav to understand the terminology.
the rice in price (sterling) is cancelled out by the depreciation of this currency against rupees, therefor evrything remains constant.
dont hate the bad explanation sorry

thanks for answerings, no one answered this question for 2 days, and i had to repost it. what you have explained is obvious, the answer is either b or c, the main question here is why is it constant in pak rupes, why not in pounds, its a british company

 

[00mfr]

thanks for answerings, no one answered this question for 2 days, and i had to repost it. what you have explained is obvious, the answer is either b or c, the main question here is why is it constant in pak rupes, why not in pounds, its a british company

its simple,
for example, the british company receivd 10 pound for a good
the depreciation of pounds against rupees would mean them paying less but it will NOT affect the company
the rise in price however means that they now receive suppose 11 pounds for a good an therefore the earnings in pounds dont remain constant
read carefully and i hope u get it

 

[mimiswift]

i know how to do it but not to sure on how to explain it but anyways heres a try,
the answer is basically in the question, u just hav to understand the terminology.
the rice in price (sterling) is cancelled out by the depreciation of this currency against rupees, therefor evrything remains constant.
dont hate the bad explanation sorry

Its good
Thanks!

 

[student92]

its simple,
for example, the british company receivd 10 pound for a good
the depreciation of pounds against rupees would mean them paying less but it will NOT affect the company
the rise in price however means that they now receive suppose 11 pounds for a good an therefore the earnings in pounds dont remain constant
read carefully and i hope u get it

thanks alot, i owe you one.

 

[00mfr]

Its good
Thanks!

Ur welcum

 

[00mfr]

thanks alot, i owe you one.

No worries its all good

 

[student92]

 

[mimiswift]

i have a problem in M/J 2002 P1 economics
http://www.xtremepapers.com/CIE/International A And AS Level/9708 - Economics/9708_s02_qp_1.pdf
Qns 13- no idea how the answer is B? pls explain?
Qns 29- i get that since price of oil increases and its demand is inelastic then demand pull inflation's effect will reduce as people will have less money to spend on other goods.....but what i dont get is how cost push inflation's effect increases....how is it even related?
Qns 30- why D?

 

[shanky631]

then why is the value measured in dollars falling?

Okay let me give u an example. Suppose if a goods price is 400 rupees and the exchange rate is 1 dollar = 40 rupees. That means its value in terms of dollars is 10 but now if dollar has appreciated and now 1 dollar=50 rupees. The value of good in terms of dollars would become 8. So hasn't the value in terms of dollars decreased. I hope it helps u to understand the concept.

 

[Mohammed Hassan]

May someone plz explain how to solve this question...
A company, with an existing issued share capital of 200000 ordinary shares of $0.50 each, made a one for four bonus issue. This was later followed by a one for two rights issue at $1.20 per share.
What will be the balance on the share capital account after these transactions?
A. $125000
B. $187500
C. $270000
D. $375000
The answer is B, but I dont know how to get it :S

 

[Esme]

i have a problem in M/J 2002 P1 economics
http://www.xtremepapers.com/CIE/International A And AS Level/9708 - Economics/9708_s02_qp_1.pdf
Qns 13- no idea how the answer is B? pls explain?
Qns 29- i get that since price of oil increases and its demand is inelastic then demand pull inflation's effect will reduce as people will have less money to spend on other goods.....but what i dont get is how cost push inflation's effect increases....how is it even related?
Qns 30- why D?

q29 cost push inflation because oil is used in almost all industries. it is used for transport n for generating energy . also as the demand is inelastic oil will be purchased at higher prices and the firm's costs will increase. its imported cost push inflation.
q30- first of all demand for exports increase causing demand pull inflation. imports become expensive which increases raw material costs ( those that are imported) leading to cost push inflation.

sorry i dunno q13 myself.

 

[Mad Gal]

i hope this isnt in AS

Am not sure, buh i came across a few MCQs.

 

[Mad Gal]

May someone plz explain how to solve this question...
A company, with an existing issued share capital of 200000 ordinary shares of $0.50 each, made a one for four bonus issue. This was later followed by a one for two rights issue at $1.20 per share.
What will be the balance on the share capital account after these transactions?
A. $125000
B. $187500
C. $270000
D. $375000
The answer is B, but I dont know how to get it :S

currently the no.of shares = 200000 and with bonus issue the NUMBER increases to 250000 ( 1 for 4 right) and then a rights issue takes place which you have to base on the new number of shares i.e 250000. Hence, with rights issue, it = 375000.
the question asks for the share CAPITAL balance. So simply you multiply the no.of shares 375000 with its nominal value 0.50. That gives you $187500

Hope i was clear?

 

[parthrocks]

hEY CAN SOMEBODY PLZZZZ CLEAR OUT MY DOUBTS....GOD BLESS U...SPECIALLY MAD GAL AND YOUZAIRE IF U CAN...PLZZZZZ

 

[Mohammed Hassan]

currently the no.of shares = 200000 and with bonus issue the NUMBER increases to 250000 ( 1 for 4 right) and then a rights issue takes place which you have to base on the new number of shares i.e 250000. Hence, with rights issue, it = 375000.
the question asks for the share CAPITAL balance. So simply you multiply the no.of shares 375000 with its nominal value 0.50. That gives you $187500

Hope i was clear?

yup! u were 100% clear, thank u very much I appreciate that