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ECS3708 ASSEMMENT 2 SEMESTER 1 2024
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ECS3708 ASSEMMENT 2 SEMESTER 1 2024
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Summary Microeconomics
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ECS2601 BMZ ASSESSMENT 4 SEMESTER 2 2024 MASTER In a perfectly competitive industry, the amount of output that a rm decides to sell has no effect on the market price, because… a. the rm’s output...
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ECS3708 ASSESSMENT 2 SEMESTER 1 2024
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BMZ ACADEMYBMZ ACADEMY
@061 262 1185/068 053 8213/0717 513 144
BMZ ACADEMY 061 262 1185/068 053 8213/0717 513 144
, BMZ ACADEMY
Question 1
Suppose that the consumer has a Cobb Douglas utility function:
𝑈(𝑋1 , 𝑋2 ) = 𝛼𝑙𝑛𝑋1 + 𝛽𝑙𝑛𝑋2
Determine the marginal rate of substitution of 𝑋1 for 𝑋2. (4)
α
𝑀𝑈𝑋1 =
𝑋1
β
𝑀𝑈𝑋2 =
X2
𝑀𝑈𝑋1 α 𝑋2
𝑀𝑅𝑆𝑋1𝑋2 = =
𝑀𝑈𝑋2 β 𝑋1
Question 2
Suppose a share in Company A is forecasted to be R11 in the next period. If a share
similar to Company A is paying a rate of return of 10%, what must be the current price
of the share in Company A (5)
FV = 11
Rate = 10%
𝑃𝑉 = 𝐹𝑉(1 + 𝑟)−1
11
=
1,1
= 𝑅10
Therefore, the current value = R10
BMZ ACADEMY 061 262 1185/068 053 8213/0717 513 144
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