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1. Land:- primary natural resources over which people have the power of ownership , control and
disposal, and can be used to yield income or organize/carry out economic activities – gift
of nature whose supply is fixed (no production cost) and whose reward is rent; include soil,
rivers/lakes, mineral deposits, forests etc: owners of land can only improve on its quality
since supply is fixed. Distinguishing characteristics: (i) fixed in supply (ii) no production
costs; land provides the site on/at which production takes place.
2. Labor:- human physical or mental effort directed to the production of goods and services; its
reward is wages/salaries. It has got three distinguishing characteristics from the other
factors:
(i) What is paid for/bought is the services NOT labor or labor force.
(ii) Its both a factor of production and the end to which production is under taken.
(iii) Cannot be separated from the owner/labor.
3.Capital:- Stock of wealth or goods which are not required for their own sake but for further
production of other goods i.e. any produced producer goods (any product of land
and labor which is reserved for further production) eg. fixed capital such as
machinery, buildings, vehicles; working/circulating capital like stock of raw materials
& work-in progress; reward – interest.
4. Entrepreneur: - the organizing aspect of resource combination in a production process which
involves risking of capital and decision making/organization/combination in anticipation
of demand; entrepreneurial ability refers to the organizational skills which combine all the
other factors of production (resources) for productive use; Its reward is profit . An
entrepreneur is easily identified in small businesses through his role but in large
businesses his function could be split between several managers and shareholders. Some
economists look at enterprise not as a separate factor of production but as a specialized
form of labor (consider self-employment or private practice.)
Wilfykil answered the question on February 6, 2019 at 07:53
- The utility (U) obtained by Olympia by consuming food (F) and shelter (S) is given by utility
function U = FS
Calculate the marginal rate of substitution...(Solved)
The utility (U) obtained by Olympia by consuming food (F) and shelter (S) is given by utility
function U = FS
Calculate the marginal rate of substitution when Olympia spends the Sh. 1,200 budget by
purchasing three units of each.
Date posted: February 6, 2019. Answers (1)
- If Mrs. Breader views butter and margarine as perfect substitutes, draw a set of indifference
curves that describe her preference for these two commodities(Solved)
If Mrs. Breader views butter and margarine as perfect substitutes, draw a set of indifference
curves that describe her preference for these two commodities
Date posted: February 6, 2019. Answers (1)
- State the law of diminishing marginal utility(Solved)
State the law of diminishing marginal utility
Date posted: February 6, 2019. Answers (1)
- Explain any four uses of indifference curve analysis(Solved)
Explain any four uses of indifference curve analysis
Date posted: February 6, 2019. Answers (1)
- Briefly explain two exceptions to the definition of an indifference curve.(Solved)
Briefly explain two exceptions to the definition of an indifference curve.
Date posted: February 6, 2019. Answers (1)
- Explain the main characteristics of indifference curves(Solved)
Explain the main characteristics of indifference curves
Date posted: February 6, 2019. Answers (1)
- What is an indifference curve?(Solved)
What is an indifference curve?
Date posted: February 6, 2019. Answers (1)
- Illustrate and explain Consumer equilibrium under the ordinalist approach(Solved)
Illustrate and explain Consumer equilibrium under the ordinalist approach
Date posted: February 6, 2019. Answers (1)
- Illustrate and explain Consumer equilibrium under the cardinalist approach(Solved)
Illustrate and explain Consumer equilibrium under the cardinalist approach
Date posted: February 6, 2019. Answers (1)
- Define marginal utility and clearly explain the oxiom of diminishing marginal utility.(Solved)
Define marginal utility and clearly explain the oxiom of diminishing marginal utility.
Date posted: February 6, 2019. Answers (1)
- Given the following table: If there is a successful advertising campaign that convinces consumers to buy more of commodity Y, what would the effect of this be on consumption of commodities X and Z?(Solved)
If there is a successful advertising campaign that convinces consumers to buy more of
commodity Y, what would the effect of this be on consumption of commodities X and Z?
Date posted: February 6, 2019. Answers (1)
- Given the following table: What type of goods are X, Y, Z & W and why?(Solved)
What type of goods are X, Y, Z & W and why?
Date posted: February 6, 2019. Answers (1)
- With the aid of diagrams, explain the importance of the concept of elasticity of supply.(Solved)
With the aid of diagrams, explain the importance of the concept of elasticity of supply.
Date posted: February 6, 2019. Answers (1)
- Given that:
, Compute the point elasticity of demand and the point elasticity of supply at the equilibrium position.(Solved)
Compute the point elasticity of demand and the point elasticity of supply at the equilibrium position.
Date posted: February 6, 2019. Answers (1)
- Given that: , Identify which of the two functions is a demand and a supply function(Solved)
Identify which of the two functions is a demand and a supply function
Date posted: February 6, 2019. Answers (1)
- The managing director of My Kori-Lima Movie Theater Ltd has hired you as a consultant to
advise on the ticket – pricing strategy. As a basis...(Solved)
The managing director of My Kori-Lima Movie Theater Ltd has hired you as a consultant to
advise on the ticket – pricing strategy. As a basis for your recommendations you consider historical
ticket sales data which seems to suggest the following ticket – sales elasticities:
Own – price elasticity = -0.05
Refreshment price elasticity = -0.12
Nairobi Population elasticity = +0.65
Advertising elasticity = +0.70
The managing director is contemplating a moderate increase in the advertising budget in order to
increase revenue. Is this a good idea? Explain.
Date posted: February 4, 2019. Answers (1)
- The managing director of My Kori-Lima Movie Theater Ltd has hired you as a consultant to
advise on the ticket – pricing strategy. As a basis...(Solved)
The managing director of My Kori-Lima Movie Theater Ltd has hired you as a consultant to
advise on the ticket – pricing strategy. As a basis for your recommendations you consider historical
ticket sales data which seems to suggest the following ticket – sales elasticities:
Own – price elasticity = -0.05
Refreshment price elasticity = -0.12
Nairobi Population elasticity = +0.65
Advertising elasticity = +0.70
The managing director is contemplating a moderate increase in ticket prices in order to increase revenue.
Explain whether this is a good idea
Date posted: February 4, 2019. Answers (1)
- Given that:
QX = 9 – ½ P2
QY = 8P + ½ P2
Identify which of the two functions is a demand and a supply function(Solved)
Given that:
QX = 9 – ½ P2
QY = 8P + ½ P2
Identify which of the two functions is a demand and a supply function
Date posted: February 4, 2019. Answers (1)
- State the main determinants of elasticity of demand(Solved)
State the main determinants of elasticity of demand
Date posted: February 4, 2019. Answers (1)
- The demand for a commodity is five units when the price is sh. 1,000 per unit. When price per unit falls to Sh. 600 the...(Solved)
The demand for a commodity is five units when the price is sh. 1,000 per unit. When price per unit falls to Sh. 600 the demand rises to six units.
Compute the point and arc elasticity of demand
Date posted: February 4, 2019. Answers (1)