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    Maths For Economics

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    kylechohan18
    The document discusses consumer price indexes and costs for a firm in Greenland. It provides data on the prices of fish, potatoes, and vodka in Greenland from 2017 to 2023. It then asks questions about calculating consumer price indexes for Greenland in 2021 and 2022 based on 2017 prices, and the rate of inflation between those years. It also discusses average earnings rising by 29% and how that impacts purchasing power. The document next provides cost data for a firm and asks questions about calculating costs, profits, and the impact of increasing output. It concludes with questions about price elasticities of demand and changes in price and income on a firm's sales.

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    © All Rights Reserved
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    Maths For Economics

    Uploaded by

    kylechohan18
    26 views2 pages
    The document discusses consumer price indexes and costs for a firm in Greenland. It provides data on the prices of fish, potatoes, and vodka in Greenland from 2017 to 2023. It then asks questions about calculating consumer price indexes for Greenland in 2021 and 2022 based on 2017 prices, and the rate of inflation between those years. It also discusses average earnings rising by 29% and how that impacts purchasing power. The document next provides cost data for a firm and asks questions about calculating costs, profits, and the impact of increasing output. It concludes with questions about price elasticities of demand and changes in price and income on a firm's sales.

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    Maths for Economics

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    The document discusses consumer price indexes and costs for a firm in Greenland. It provides data on the prices of fish, potatoes, and vodka in Greenland from 2017 to 2023. It then asks questions about calculating consumer price indexes for Greenland in 2021 and 2022 based on 2017 prices, and the rate of inflation between those years. It also discusses average earnings rising by 29% and how that impacts purchasing power. The document next provides cost data for a firm and asks questions about calculating costs, profits, and the impact of increasing output. It concludes with questions about price elasticities of demand and changes in price and income on a firm's sales.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    26 views2 pages

    Maths For Economics

    Uploaded by

    kylechohan18
    The document discusses consumer price indexes and costs for a firm in Greenland. It provides data on the prices of fish, potatoes, and vodka in Greenland from 2017 to 2023. It then asks questions about calculating consumer price indexes for Greenland in 2021 and 2022 based on 2017 prices, and the rate of inflation between those years. It also discusses average earnings rising by 29% and how that impacts purchasing power. The document next provides cost data for a firm and asks questions about calculating costs, profits, and the impact of increasing output. It concludes with questions about price elasticities of demand and changes in price and income on a firm's sales.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Maths for Economics

    In Greenland household spending is focused on three items: fish, potatoes and vodka. 50% of
    household budgets are spent on fish, 10% on potatoes and 40% on vodka. Over recent years the
    price of each has changed as follows:

    Fish (per kilo) Potatoes (per kilo) Vodka (per litre)

    2017 8 Krona 1 Krona 20 Krona

    2018 8 Krona 0.9 Krona 23 Krona

    2019 9.6 Krona 1.1 Krona 24 Krona

    2020 10 Krona 1.2 Krona 26 Krona

    2021 9.6 Krona 1.1 Krona 26 Krona

    2022 11.2 Krona 1.25 Krona 27 Krona

    2023 11.2 Krona 1.3 Krona 29 Krona

    1a) Using 2017 as the base year, calculate the Consumer Price Index for Greenland in 2021 and 2022

    1b) What was the rate of CPI inflation in Greenland in 2022? (To 1 decimal place)

    1c) Calculate the 2022 purchasing power of a 2017 Krona.

    1d) Between 2017 and 2022, average household earnings in Greenland rose by 29%. Explain why this
    matters.

    2. At its regular weekly output of 5,000 units, a firm has average fixed costs of £2.40, average total
    costs of £3.60 and average revenue of £4.00.

    2.1 Calculate its total variable costs.

    2.2 Calculate its profit

    2.3 Calculate its new profit if sales and output both rise to 6,000 units

    3. A firm sells widgets which have a PED of -0.5, a YED of +2.5 and a PES of +0.1. Its sales this year are
    40,000 units a month at a price of £2.50 a unit.

    3a) If, next month, the widget price is increased to £3, what will be the:

    a) New sales volume?


    b) Percentage change in revenue?

    3b) Ignoring 3a) calculate next year’s sales volumes if consumer real incomes fall by 2%.

    3c) The firm sees an opportunity to boost market share by cutting the price of widgets by 30%. What
    is the significance of the PES in this circumstance?

    Topical Economics Nov 2023; for Target B-A* Economics Revision books, go to a-zbusinesstraining.com
    Topical Economics Nov 2023; for Target B-A* Economics Revision books, go to a-zbusinesstraining.com

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