Other Economics Answers

Indicate whether the given statement is true(T) or false(F).

15.In general, the amount of Average Poverty Gap is bigger than the amount of Average Income Shortfall. 

16. Multidimensional Poverty Index(MPI) is computed as the sum of the incidence of multidimensional poverty and its average intensity. 

17. Multidimensional Poverty Index treats nutrition and drinking water with 

equal weight

18. The closer is Normalized Poverty Gap to 1.0, the less severe is the poverty problem.  

19. Case studies and cross-country comparisons of data show that rapid economic growth often bypasses and marginalizes the poor such that it is not compatible with reductions in poverty.

20. Actual international comparison data shows that the range of GDI is greater than that of GII. 

Indicate whether the given statement is true(T) or false(F).

7. With modern sector enlargement growth, inequality is likely to rise first and   then fall. 

8. Unlike Gini coefficient, the coefficient of variation is affected by the unit of measurement. 

9 If the area between the line of perfect income equality and the Lorenz curve 

is A, and the area under the Lorenz curve is B, then the Gini coefficient is A/(A+B). 

10. Eradication of absolute poverty is achievable but it is not possible to eliminate relative poverty. 

11. The higher is Kuznet’s ratio, the lower is the degree of inequality between high-and low-come groups in a country. 

12. Poverty is better studied with size distribution measures than those based on factor distribution.

13. With modern sector enrichment growth, inequality will unambiguously fall. 

14. Absolute poverty line is set based on purchasing power parity method that considers local price level. 

Indicate whether the given statement is

true(T) or false(F).

1. Eradication of relative poverty is a part of the

SDGs.

2. If one single person had the entire national

income, the value of the Gin coefficient ratio

would be equal to O.

3. The closer is the Lorenz curve to the 45-degree

line, the more equal the distribution of income.

4. The Lorenz curve can never lie above the 45-

degree line.

5. If the government imposed a progressive income

tax, then the value of the

Gini coefficient will become smaller.

6. Kuznet's inverted-U hypothesis states that as

economies develop, the population growth rate

first rises and later falls.

When Beza's income is Birr 2000; she purchases 100Kg of a good. When her income increases to Birr 2400, she purchases 120Kg of a good. A) What is her income elasticity? B) What type of good is?

he coefficient of elasticity of supply of a commodity is 4. A seller supplies 40 units of this commodity at a price of birr 20 per unit. What quantity of this commodity will the seller supply when price rises by birr 24 per unit

A consumer purchases two goods, food and clothing. The utility function is U=FC where

F denotes the amount of food consumed and C the amount of clothing. The price of food

is PF=2,000 Birr, the price of clothing is PC=4,000 Birr, and the income M=80,000. Find

the equilibrium of this consumer.

3. A cloth producing firm in a perfectly competitive market has the following short-run total cost function: TC = 6000 + 400Q – 20Q2 + Q3 . If the prevailing market price is birr 250 per unit of cloth, A) Should the firm produce at this price in the short-run? B) If the market price is birr 300 per unit, what will be the profit (loss) of the firm at equilibrium? Should the firm continue to produce or not? C) Calculate the shut-down price of this firm?

4. Assume a wheat producing farmer engaging in selling its product under perfect competition market faces cost functions as TC= Q3 -2Q2 +8Q and Average revenue of the farmer is given as Birr 8 . Having this information, A) Determine the optimal level of output and price in the short run. B) Calculate the economic profit (loss) the farmer will obtain (incur) C) What will be the minimum price level the farmer gets to continue in wheat production

Ramsis is a heavy equipment rental company. It is considerang the purchase of Tower crane at a price of BD 775,000. This crane is expected to operate for 15 years before returement with no salvage value at the end. The company as plan to rent the crane for BD 108.000 per year stang year and the rental increases by 10% thereafter. Cost of thas mantenice is expected to be BD 15,000 each year. a) Wisat is the discounted payback period if the MARR is 7% per year? b) In your enemeening analysis study, which method would you select (Payback or Present worth) to solve this problem? And why?

An engineering consulting firm measures its output in a standard service hour unit. The variable cost is $62 per standard service hour. The selling price is $85.56 per hour. The maximum output of the firm is 160,000 hours per year, and its fixed cost is $2,024,000 per year. What is the breakeven point in standard service hours and in percentage of total

capacity?