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University United Arab Emirates University (UAEU)
Subject Economics

Answer all the questions:
Q 1) William Howe must decide whether resort during June, July and August of vacation at $5 a day and he intend 0 start a business renting beach umbrellas at an ocean operate this business, he does intend to lease 50 umbrellas for the three- month period next summer. He believes he can rent each umbrella:r $3,000. To o expenses other than the leasing costs and a feet hoafvse3 to hire anyone (but himself), three- month period doing he work. and he has. no Howe is a college,000 per month to rent the business locate it. a student and if he did not operate this business, he could,000 for the Howe re n s all 50 of his umbrellas on each of these days, what will be his accounting b) What will be his economic profit for the summer?

Q2) A book is to be written by Britney Spears. Batman Books agrees to pay Britain executives stated that it was hard to sell more than 500,000 copies o about $ g publisher, Battlialtile king for the rights to this not- yet- written memoir. According to one lead in. d over. On cr Books could earn a profit of roughly $1.2 million if it sold 625,000 COp . . publish a book, and very exceptional to sell 1 million copies. Were Batman managers taking f nonfiction hardcover? a, 1 .3minhar c million. copses other hands, if it sold 375,000 copies, managers would lose a stall- 1 risk in publishing this book?

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Q3) The Government has various tools available to deal with the Market Failure, the few 0f the tools available to the Government was
• Price Profit Regulations
• Restrictive Trade policy and practices
• Direct Controls or Regulations
• Patents and Law of Tort
• Subsidy Policy
• Tax Policy
• Foreign Exchange Policy.

Briefly provide your views on all the above to predominantly sustain an Economy in Market forces.

Q4) The Abner Corporation, a retail seller of television sets, wants to determine how many television sets it must sell to earn a profit of $12,000 per month. The price of each television set is $300, and the average variable cost is $100. a. What is the required sales volume if the Abner Corporation’s monthly fixed costs are $5,000 per month?

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