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Questions to answer

1. The Ministry of food and Agric is reported in the Daily Graphic of Wed 2
April, 2014, page 32, that it
will increase the strict enforcement of poultry and livestock import policy to boost local production and
withdraw the countries importation bill by the end of the year.
The policy allows an importer to bring into the country only 100 tons each of livestock and poultry
products every 3 months.
A. With the aid of an appropriate diagram, explain 4 effects on the poultry and livestock market in
Ghana in the short run.
B. What should the government do further to let the policy work
C. Explain 5 benefits that will accrue to the nation in the long run should the policy succeed to
achieve its objectives.

2. Assume that there is an on-going labour unrest in the petroleum industry in Ghana on demand for
higher wages and salaries. Using the concept of wage elasticity of demand for labour:

A. Explain how the bargaining powers of the various categories of workers in the industry can
influence the hiring and firing decisions of the employers in the industry.

3. A firm sells 4 different kinds of goods (good A, B, C and D). The coefficient of elasticity of the goods -
3, -0.25, 0 and respectively. The workers in the particular firm have been employed with respect to
the type of good produced by the different category of workers. Due to the on-going economic
hardships in the country, the workers in the firm have written to management to increase their wages
by 45% across board. To what extend will the demand of the workers be successful.

4. XYZ limited started operations in a single room. The company after 15yrs in existence can boost of 5
branches in five regional capitals in Ghana. It has recently been notice by management that as the scale
of operation increases in the long run, management of cost of doing business is becoming a doubting
A. Identify and explain five economic reasons that the firm is experiencing this problem

B. Explain five economic reasons underlying the lower cost period of the firm in the long run.

5. The maize market in Ghana is said to have numerous sellers and buyers of maize. Experts say that in
the long run all maize sellers and buyers receive a competitive price that makes all firms in the market
A. You are required to use a diagram to illustrate the long run equilibrium conditions in the maize
B. If all firms breakeven (earn normal or zero economic profit) what justification exists for the firms to
continue to be in business.
C. Explain any 4 economic benefits that the long run equilibrium condition market will bring to the

D. All though perfect competitive markets are rare in the real world, explain 3 reasons for studying

6. Consider a monopoly in the following information P=100 Q, MR=100 2Q, ATC = MC = 40.

A. Use the information above and draw a diagram to show the equilibrium price and quantity in
B. What will be the equilibrium price and quantity in a perfectly competitive market? Show this in
the diagram you have drawn and mark it as Z
C. Find consumer surplus in monopoly and in perfect competitive. Find monopoly profits and dead
weight loss
D. What is a perfect competitive profit?

7. Consider the following statements and explain why they are true or false.

A. The monopolist always makes economic profits? Explain and support with 3 diagrams
B. With perfect price discrimination, the consumer surplus is zero, True or False. Explain with

8. Currently the boko Haram group in Nigeria is said to have captured 276 school girls. This case has
received the world attention in each passing day. Several attempts to pursue the kidnappers have fallen
on the deaf ears of the group.
Now, there is a proposal from book haram to the Nigerian government to release it members in prisons
in exchange of the kidnapped girls. Though the negotiations are on going, as students of economics,
develop a simple business game matrix for this game, bearing in mind a two possible outcomes, thus;
A. Release book haram prisoners
B. Dont release book haram prisoners.
C. Provide a simple return that may accrue to the two players in the game.
D. What should be a dominant strategy of each player in the game?
E. Explain 4 welfare implications of this game in the Nigerian society.