Transfer earnings – the payment which is necessary to keep a factor of production in its present
use/employment, (hence preventing it from transferring to another use.) Transfer earnings are
determined by what a factor of production could have earned in its next best alternative employment –
thus it?s the opportunity cost of putting or keeping a factor of production in its present use.
Economic rent is the payment made to a factor of production over and above that which is necessary to
keep it in its current use. Take an example of a doctor who is earning Ksh. 40,000 per month in the
private sector; if the same doctor would be paid Ksh. 30,000 per month in the public sector and assuming
all other working conditions of service are the same, transfer earnings would be Kshs. 30,000 per month,
as this is the minimum amount of payment necessary to keep the doctor in the present (private) sector.
The doctor is then earning an economic rent of Kshs. 10,000 that is (40,000 – 30,000) per month
Wilfykil answered the question on February 6, 2019 at 09:46
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A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 +...
(Solved)
A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 + 4Q and the total fixed cost is 4.
Determine the output level at the break-even point.
Date posted:
February 6, 2019
.
Answers (1)
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A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 +...
(Solved)
A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 + 4Q and the total fixed cost is 4.
Determine the level of super-normal profit if any.
Date posted:
February 6, 2019
.
Answers (1)
-
A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 +...
(Solved)
A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 + 4Q and the total fixed cost is 4.
Determine the profit maximizing output.
Date posted:
February 6, 2019
.
Answers (1)
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Illustrate and explain the short-run supply curve of a firm in perfect competition
(Solved)
Illustrate and explain the short-run supply curve of a firm in perfect competition
Date posted:
February 6, 2019
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Answers (1)
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Explain why a firm in perfect competition may continue in the production of goods which it
can only sell at a loss and why it cannot...
(Solved)
Explain why a firm in perfect competition may continue in the production of goods which it
can only sell at a loss and why it cannot continue doing this indefinitely
Date posted:
February 6, 2019
.
Answers (1)
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Differentiate between economies of scale and returns to scale
(Solved)
Differentiate between economies of scale and returns to scale
Date posted:
February 6, 2019
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Answers (1)
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Write explanatory notes on the various types of internal and external economies of scale.
(Solved)
Write explanatory notes on the various types of internal and external economies of scale.
Date posted:
February 6, 2019
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Answers (1)
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What is meant by economies and dis-economies of scale?
(Solved)
What is meant by economies and dis-economies of scale?
Date posted:
February 6, 2019
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Answers (1)
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Using a well-illustrated diagram, show that a monopolist can make losses in the short-run even
when MC = MR
(Solved)
Using a well-illustrated diagram, show that a monopolist can make losses in the short-run even
when MC = MR
Date posted:
February 6, 2019
.
Answers (1)
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Using a well illustrated diagram, explain why prices are "sticky" downwards under an
oligopolistic market structure
(Solved)
Using a well illustrated diagram, explain why prices are "sticky" downwards under an
oligopolistic market structure
Date posted:
February 6, 2019
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Answers (1)
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What is "Oligopoly"?
(Solved)
What is "Oligopoly"?
Date posted:
February 6, 2019
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Answers (1)
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What key assumptions underlie the law of variable proportions?
(Solved)
What key assumptions underlie the law of variable proportions?
Date posted:
February 6, 2019
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Answers (1)
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State the law of variable proportions
(Solved)
State the law of variable proportions
Date posted:
February 6, 2019
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Answers (1)
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Define the term "production function"
(Solved)
Define the term "production function"
Date posted:
February 6, 2019
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Answers (1)
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What policy recommendations would you suggest to reduce regional development
imbalances if any in developing countries?
(Solved)
What policy recommendations would you suggest to reduce regional development
imbalances if any in developing countries?
Date posted:
February 6, 2019
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Answers (1)
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State the aspects of significance of factor mobility
(Solved)
State the aspects of significance of factor mobility
Date posted:
February 6, 2019
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Answers (1)
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Explain the meaning of mobility of factors of production. To what extent are factors of
production mobile?
(Solved)
Explain the meaning of mobility of factors of production. To what extent are factors of
production mobile
Date posted:
February 6, 2019
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Answers (1)
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What are factors of production?
(Solved)
What are factors of production?
Date posted:
February 6, 2019
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Answers (1)
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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
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Answers (1)
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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)