TotsPoses, Inc., a profit-maximizing business, is the only photography business in town that specializes in portraits of small children. George, who owns and runs TotsPoses, expects to encounter an average of eight customers per day, each with a reservation price shown in the following table. Assume George has no fixed costs, and his cost of producing each portrait is $25.

a. Suppose George is permitted to charge two prices. He knows that customers with a reservation price above $30 never bother with coupons, whereas those with a reservation price of $30 or less always use them. At what level should George set the list price of a portrait? At what level should he set the discount price? How many photo portraits will he sell at each price?

List price of a portrait: $__   

Number of portraits to be sold at the list price: __portraits

Discount price of a portrait: $__   

Number of portraits to be sold at the discounted price: __portraits

b. In this case, what is George’s economic profit and how much consumer surplus is generated each day?

Economic profit: $__   

Consumer surplus: $__

TotsPoses, Inc., a profit-maximizing business, is the only photography business in town that specializes in portraits of small children. George, who owns and runs TotsPoses, expects to encounter an average of eight customers per day, each with a reservation price shown in the following table. Assume George has no fixed costs, and his cost of producing each portrait is $35.

a. Complete the following table.

Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Enter your responses as whole numbers.

How much should George charge if he must charge a single price to all customers? $__

At this price, how many portraits will George produce each day? __ portraits

What will be his economic profit? $__ per day

b. How much consumer surplus is generated each day at this price? $__

c. What is the socially efficient number of portraits? __ portraits

d. George is very experienced in the business and knows the reservation price of each of his customers. If he is allowed to charge any price he likes to any consumer, how many portraits will he produce each day? __ portraits.

What will his economic profit be? $__ per day

e. In this case, how much consumer surplus is generated each day? $__

Assume you have to find the optimal commodity tax rate for all the goods in an economy featuring only 17 goods. How many first order conditions would you have to find in your DWL minimisation problem?

Suppose you have experienced two types of banks one being Islamic and the other one as conventional. Based on this;
(a) What key differences and major issues of both types would share with your friend?
(b) What main reasons would you emphasize in order to help your friend to either choose Islamic or conventional bank?

Discuss the tradeoffs between stability & growth presented by the use of fiscal & monetary policies. Discuss arguments in favor of & opposed to the use of discretionary policy to manage the business cycle. Provide at least one example of each.

1. explain the rise of anti-trust laws in the late 19^th
2. How did anti-trust laws shift after WW1? (WW1 ended in 1918)
3. What does the documentary mean that anti-trust laws depend on politics more than any other area of law?

Explain income elasticity of demand? Discuss how can it be used to determine whether a good is a normal good or an inferior good?

PART B

The RBA intends to use open market operations in addition to reducing the cash rate.

Assume that a bond with no expiration date pays a fixed $300 annual interest and is selling for its face value of $10,000.

1. Calculate the interest yield on the bond.

2. Will the RBA buy or sell bonds if it uses open market operations? Briefly explain.

3. As a result of the RBA’s decision above which of these two outcomes is more likely or correct?

1. The market value of the bond will increase to $15,000 OR
2. The market value of the bond will decrease to $6,000.

Explain your answer by calculating the new interest yield after the RBA’s open market operations; show your workings.

QUESTION TWO

PART A

The following two economic events impact on the value of the Australian dollar in the foreign exchange rate market.

Speculators believe that the price of Australian exported commodities (iron ore, coal) will increase and at the same time Australian households and firms purchase less imports.

REQUIRED:

Explain the effect of the above economic conditions on the demand for and supply of Australian dollars and the change in the value of the Australian dollar (AUD) in the foreign exchange rate market (Note: a diagram is not required for this question).

Calculate the percent change in the price of stamps for 1983 and today.

Calculate the percent change in the price level for 1983 and today.

What do you think will happen to the real price of stamps between 1973 and 1983? Between 1983 and today? Notice that I am asking for a prediction before you make the computation.

Calculate the real price of stamps.

Are the changes in the real price consistent with your prediction?

What does it mean if the real price falls? Rises? Remains constant?

Inflation Issues

• Does the base basket used to create the CPI precisely reflect your individual choices? If the answer is no, do the inflation rates calculated using the CPI represent the changes in purchasing power that you actually experience?
• Do you substitute between goods as one becomes more expensive, i.e., would you buy more of a less expensive good if the price of your first choice rose significantly? If the answer is yes, does the CPI inflation rate represent the decrease in purchasing power that you actually experienced?
• Based on your answers to the above, does the choice of the market basket matter?

what are the goals of a human resource department? choose an organisation that you are familiar with and indicate which of these goals will be more important in this organisation and discuss why?

Analyse the current issues in promoting health (OH&S) that a manager needs to be aware of while managing people in contemporary organisations. Make appropriate recommendations in managing the issues