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economics multiple choice!!

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~cornelia~:
can some one explain to me these questions?

AS level economics paper 1 may/june 2006
question 1,7,10,11,12

lastgift:
Hi Cornelia!
The answer to Q1 is D because if interest rates rise, the the returns on saving in a bank is going to be higher which requires the consumer to now choose between saving or spending, thus the OC rises.

The answer to 7 is B because the elasticity of demand is unitary, the condition is that the total revenue of the firm should remain $ 48000 (qty*price= 12*4000). We have to know find out the price which when multiplied with 20000 would give us 48000. So, 48000/20000= $ 2.4

The answer to 10 is B because a rise in tax would shift the supply curve to the left---> form S1 to S2 and a fall in income would decrease demand, again a leftward shift---> D1 to D2.

The answer to 11 is C. The wine has a perfectly inelastic demand, no matter what, it is going to be bought and a rise in price would mean more expenditure. Demand and sales would never fall if the PED is 0. A is false because the price would rise by the amount of tariff as the wine producers can safely pass on the burden of the tariff to the consumers as the increase in price wouldnt affect the demand.

In Q12, the original consumer surplus is WPQ, after the shift it is WTV. The difference between these two rectangles is the triangle of PQVT.

Omega:
The partnership act is only taken into account if the partners do not have a written Partnership Agreement.

The not signed agreement is usually called as the limited partnership too, because there is no agreement signed between the partners.

Here's an example:
If there are 2 companies and they're fighting over the profit sharing, without no partnership agreement signed then the profit would be divided equally as to the partnership agreement.

This is the rule followed everywhere now.

lastgift:
Omega I thnk you got the wrong topic.  :)

Omega:
I think I did a mistake. I'm really sorry for it. Sorry for the confusion though.

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