Economics Questions and Answers

If the demand for a commodity remains constant as price increases, the commodity is said to be perfectly price inelastic. This means that the quantity demanded of the commodity does not change at all in response to changes in price.

Price elasticity of demand is a measure of how responsive the demand for a good or service is to changes in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.

A perfectly price inelastic good has an elasticity of demand of 0. This means that the quantity demanded does not change at all in response to changes in price.

Some examples of perfectly price inelastic goods include:

- Life-saving drugs

- Basic food items

- Essential services (e.g., electricity, water)

In these cases, the demand for the good is so high that even a large increase in price will not cause consumers to decrease their consumption.

The answer is equipment. Working capital is the difference between a company's current assets and current liabilities. Current assets are those that can be converted into cash within a year, such as cash, accounts receivable, and inventory. Current liabilities are those that are due within a year, such as accounts payable and accrued expenses.

Equipment is a long-term asset, meaning that it is not expected to be converted into cash within a year. Therefore, it is not classified as working capital.

The other options, fuel, money to pay wages, and semi-finished goods, are all current assets and are therefore classified as working capital.

To summarize, the item that is not classified as working capital is equipment.

A rational consumer should consume more of commodity X when the marginal utility from the consumption of commodity X (Mux) is greater than the price commodity X (Px). This is because the consumer is getting more satisfaction from consuming each additional unit of commodity X than they are paying for it. As a result, the consumer should continue to consume more of the commodity until the marginal utility is equal to the price.

An economy system is mainly concerned with the allocation of scarce resources between alternative ends. This is because resources are always scarce, meaning that there is never enough to satisfy all of our wants and needs. As a result, we have to make choices about how to allocate our resources in a way that maximizes our well-being.

Money is able to function more as a medium of exchange when there is specialization of labour. Specialization of labour, on the other hand, increases the need for money. This is because specialization means that people produce different goods and services, which they then trade with each other. Money is needed to facilitate these trades.

The IMF is an international organization that was founded in 1944. Its main goal is to promote international monetary cooperation and facilitate international trade. The IMF does this by providing loans to countries that are experiencing balance of payments problems.

A balance of payments problem occurs when a country's imports exceed its exports. This can lead to a shortage of foreign currency, which can make it difficult for the country to pay for imports. The IMF can provide loans to countries with balance of payments problems to help them to cover their import shortfalls and stabilize their currencies. 

National income is calculated mainly to determine the level of sectoral performance.

The level of sectoral performance is important because it can indicate the strength of the economy and the potential for future growth. By measuring the level of sectoral performance, governments can identify areas where the economy is doing well and areas where it needs improvement.

Marginal product is negative at point S on the total product curve. This is because the total product curve is decreasing at point S. When the total product curve is decreasing, the marginal product is negative.

The marginal product is the additional output that is produced when one additional unit of input is added. In this case, the additional output is decreasing, so the marginal product is negative.

The other points on the total product curve, P, Q, and R, are all increasing. Therefore, the marginal product is positive at these points.

To overcome the problem of double counting under the expenditure approach, only spending on final goods are considered.

The expenditure approach to calculating national income measures the total spending on goods and services in an economy. However, this can lead to double counting, as the same good or service can be counted multiple times if it is used in the production of other goods and services.

To avoid double counting, only spending on final goods is considered when using the expenditure approach. Final goods are goods and services that are not used to produce other goods and services. Intermediate goods, on the other hand, are goods and services that are used to produce other goods and services.

By only considering spending on final goods, the problem of double counting is avoided. This is because final goods are not used to produce other goods and services, so they are not counted multiple times.

A government may cause a favourable change in her invisible trade account by developing tourism and other services. Invisible trade account records the movement of services across borders. It includes items such as tourism, transportation, insurance, and royalties.

A government can promote tourism and other services by:

- Investing in infrastructure, such as airports, hotels, and tourist attractions.

- Promoting the country as a tourist destination.

- Providing incentives to businesses that provide services to foreigners.

These measures can help to increase the number of tourists and other service providers in the country, which can lead to a favourable change in the invisible trade account.