Economics A Level Paper 3 MCQ

[krtcobain82]

I want explanations for the following questions.

1) The following data about a firm are available.
    
    No of men employed     1       2       3
    total output/ units       20     35      45
  
    Demand schedule for the product of the firm

                   Price/ $                      8      9     10
    quantity demanded/units              45    35     20
On the basis of the above data, what is the marginal revenue product from the employment of the third   man?
  
     A) $45    B) $115  C) $200   D) $315



2) If M = the money supply, P = the general price level, Y = real national income and T = the volume of transactions, which of the following ratios represents the income velocity of circulation of money?

A) M/(PY)   B) M/(PT)    C) (MY)/ P   D) (Thank You)/ M

[Dasith]

1st question i think ans shuld b (A)

because we assume in free market people are employed where MRP(marginal revenue product) = MC(marginal cost)
here MRP of employing the 3rd worker is 45 becoz

TR @ 35 units of output is (35*9 ) =315
TR @ 45 units of output is (45*8 )=360
Difference is MR  i.e

360-315=45 **

Got it?          

[Dasith]

2nd question

income velocity of circulation of money is, level(velocity) at which a given unit of money is circulated in a given period of time.

your ans dosent seem to give the ans i got !!

By the way wat i got is (PY) / M

Formulae is M V = PY

therefore v(i.e wat we want) =PY/M   (thats how i got it)