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EcCONOMICS P1 DOUBTS!

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Tohru Kyo Sohma:
ok...i have some doubts...can anyone help me (actually im counting on u dasith to help  :P)its may/june 2006 p1 qns 7,19,27 and 28?
i have the answers...duh....but i need explanation on y is it that answer and y not the others!pls help my paper is in the morning!

Dasith:
hehe , Dasith to da rescue :P :P :P

By the way hope u get it in time lol ;)

7) ans is b because when PED = 1 , we gotta assume revenue is equal @ any level of output / price, @ least thats wat the cambridge assumes ;) :P   ,

Revenue here is 12 x 4000
i.e 48000

If we assume that revenue is same @ output of 20000 then Price =
48000/20000 = 2.4

19)
country N :
Gives up 1 Y for 4 X ( hope u knw hw to calculate that )if not just tell me :)

Country M:
gives up 1 Y for 2 X (hope u knw this too )

country N produces X & M produces Y(after specialisation)
so u can see if they Trade @ price 1y=3x here country N will gain because it has to give up ony 3x to get 1 y compared to 4x before specialisation , & country M gets 3 x for one y , where b4 specialisation it had got only 2x for every 1 y
ans = A

27)
Increased in ternational competition means Reduction in prices of imports(negetive inflation) , i.e because world supply curve is much lower(usually ) than domestic curves , & worsening of current a/c means people buy the cheap imports,which leads to increase in supply of local currency in world markets so exchange rate depreciates :)
ans is D

28)
pound appreciates againts $*
euro appreciates against pound

so which means euro appreciated agains $ too because $ depreciated agains pound !

soo this means $ againts pound depreciates*
& $ depreciates agianst euro


ans is C

27)

Tohru Kyo Sohma:
THANK YOU DASITH! ;D
i have a few more doubts if u have time to solve it
2008 m/j p1 qns 7,8,16 (why is it C and why isnt it B),18 and 30
2009 m/j p1 qns 7 and 22
and can u explain the differences between comparitive and absolute advantage ,what is purchasing power parity, and what is likely to happen when interest rates increase? 8) :o :o :o :o :o

Dasith:

--- Quote from: mimiswift on May 27, 2011, 01:12:00 am ---THANK YOU DASITH! ;D
i have a few more doubts if u have time to solve it
2008 m/j p1 qns 7,8,16 (why is it C and why isnt it B),18 and 30
2009 m/j p1 qns 7 and 22
and can u explain the differences between comparitive and absolute advantage ,what is purchasing power parity, and what is likely to happen when interest rates increase? 8) :o :o :o :o :o

--- End quote ---

2008:
got to go 4 exam so i'm gonna make it quick ,

7) same as i explaned b4 u assume revenue is same & ......
8)its unitary or 1 for cola , calculate using formulae so A & b's out
its not D because its infinite for nuts i.e 1/0 x 100
ans is C

16)u gotta calculate socal net benifit or loss
i.e (private + external benifit) - (Pvt + external cost)
& coose one which has greater positive value !

gotta go .. sorry about the rest of the ans , i'm really running short of time lol , hope u dont mind ;D

Tohru Kyo Sohma:
its ok...thanks again....bye!BOL

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