2. The demand for TVs in a certain country is given by D = 25000 - 70P, where P the price of a TV. Supply by domestic TV producers is S = 15000 50P (a) Assuming that the economy is closed, find the equilibrium price and production quantity of TVs (3 marks) (b) The economy opens to trade. The world price of a TV is $80. Find the domestic quantities demanded and supplied and the quantity of imports or exports. Who will support the opening of the TV market to trade and who will oppose it? (4 marks) (c) The government imposes a tariff of $20 per TV. Find the effects on domestic quantities demanded and supplied and on the quantity of imports or exports. Also find the tariff revenue collected by government. Who will support the imposition of tariff and who will oppose it? (4 marks) (d) Suppose the government imposes an import quota of 1200 TVs. Find the equilibrium price in the domestic TV market, as well as the quantities produced by domestic firms and purchased by domestic consumers. (4 marks) Type your answer here: Question 3 (2 mark) Kings sole trader in his business for the past 3 years provides the following date KING KONG Comparative Statement of Financial Position at 10 June 2013 2019 CURRENT ASSETS Cash 55:40 Accounts receivable 54290 3150 Inventory 6000 6600 Prepaid insurance 300 160 NON-CURRENT ASSETS Equipment 19 200 25 500 Accum depre equipment (60001 C75001 Land 20 400 24 000 Motor vehicles 14 550 1560 Accum oppre vehicles (5.490) (6 300 TOTAL ASSETS 53250 61 950 CURRENT LIABILITIES Bankovendien 300 Accounts payable 6-150 7 950 NON-CURRENT LIABILITIES Long-term mortgage 14.100 18.900 TOTAL LIABILITIES 20.550 26350 NET ASSETS $32.00 $35.100 EQUITY King Kong. Capital 532 700 $35 100 TOTAL EQUITY 52270 $35100 KING KONG Income Statement for the year ended 30 June 2019 Sales $16800 Les Cost of sales 5100 GROSS PROFIT 11700 Less Exposes (includepee) 8610 PROFIT $1000 Additional Information King contributod 6000 cash as capital and made cash withdrawals during 2019. Besides, the bank overdraft was considered to be part of the entity's every day cash management activities. Required: Use the indirect method to prepare a Statement of Cash Flows from operating activities only for King Kong's business for the year coded 30 June 2019. Type your answer here: END OF THE EXAMINATION 2. The demand for TVs in a certain country is given by D = 25000 - 70P, where P the price of a TV. Supply by domestic TV producers is S = 15000 50P (a) Assuming that the economy is closed, find the equilibrium price and production quantity of TVs (3 marks) (b) The economy opens to trade. The world price of a TV is $80. Find the domestic quantities demanded and supplied and the quantity of imports or exports. Who will support the opening of the TV market to trade and who will oppose it? (4 marks) (c) The government imposes a tariff of $20 per TV. Find the effects on domestic quantities demanded and supplied and on the quantity of imports or exports. Also find the tariff revenue collected by government. Who will support the imposition of tariff and who will oppose it? (4 marks) (d) Suppose the government imposes an import quota of 1200 TVs. Find the equilibrium price in the domestic TV market, as well as the quantities produced by domestic firms and purchased by domestic consumers. (4 marks) Type your answer here: Question 3 (2 mark) Kings sole trader in his business for the past 3 years provides the following date KING KONG Comparative Statement of Financial Position at 10 June 2013 2019 CURRENT ASSETS Cash 55:40 Accounts receivable 54290 3150 Inventory 6000 6600 Prepaid insurance 300 160 NON-CURRENT ASSETS Equipment 19 200 25 500 Accum depre equipment (60001 C75001 Land 20 400 24 000 Motor vehicles 14 550 1560 Accum oppre vehicles (5.490) (6 300 TOTAL ASSETS 53250 61 950 CURRENT LIABILITIES Bankovendien 300 Accounts payable 6-150 7 950 NON-CURRENT LIABILITIES Long-term mortgage 14.100 18.900 TOTAL LIABILITIES 20.550 26350 NET ASSETS $32.00 $35.100 EQUITY King Kong. Capital 532 700 $35 100 TOTAL EQUITY 52270 $35100 KING KONG Income Statement for the year ended 30 June 2019 Sales $16800 Les Cost of sales 5100 GROSS PROFIT 11700 Less Exposes (includepee) 8610 PROFIT $1000 Additional Information King contributod 6000 cash as capital and made cash withdrawals during 2019. Besides, the bank overdraft was considered to be part of the entity's every day cash management activities. Required: Use the indirect method to prepare a Statement of Cash Flows from operating activities only for King Kong's business for the year coded 30 June 2019. Type your answer here: END OF THE EXAMINATION
