Economics is a broad and dynamic field that studies the allocation of scarce resources to satisfy unlimited wants and needs. It encompasses the historical development of economic thought, the definition and scope of the subject, and concepts such as scarcity, needs, wants, and factors of production. Understanding these foundational concepts is essential for comprehending economic principles and analyzing real-world economic phenomena.
1. Historical Background of the Subject Economics:
Economics as a field of study has a long history that can be traced back to ancient civilizations such as Mesopotamia, Egypt, Greece, and Rome. However, modern economics emerged as a distinct discipline in the late 18th century with the publication of Adam Smith's "The Wealth of Nations" in 1776. Since then, economics has evolved through various schools of thought, including classical economics, neoclassical economics, Keynesian economics, and many others. Today, economics plays a crucial role in understanding and analyzing the production, distribution, and consumption of goods and services in society.
2. Definition of Economics:
Economics is the social science that studies how individuals, businesses, governments, and societies make choices about the allocation of scarce resources to satisfy unlimited human wants. It explores the production, distribution, and consumption of goods and services and the behavior and interactions of economic agents such as consumers, producers, and policymakers.
3. Scope and Concepts of Principles of Economics:
The scope of principles of economics encompasses a wide range of topics and concepts. It covers microeconomics, which focuses on individual economic units such as households, firms, and markets, and macroeconomics, which examines aggregate economic variables such as national income, employment, inflation, and economic growth. Principles of economics also includes the study of economic theories, models, and concepts such as supply and demand, opportunity cost, production, costs, market structures, fiscal and monetary policy, international trade, and more.
4. Concept of Scarcity and Needs and Wants:
Scarcity refers to the fundamental economic problem of limited resources and unlimited wants. Resources such as land, labor, capital, and entrepreneurship are finite, while human wants and needs are infinite. This scarcity necessitates making choices and trade-offs since not all wants and needs can be satisfied due to the limited availability of resources. Needs are the basic necessities required for survival, such as food, shelter, and clothing. Wants, on the other hand, are desires for goods and services that go beyond basic needs and vary among individuals and societies.
5. Factors of Production:
The factors of production are the resources used in the production of goods and services. They include:
- Land: This refers to natural resources such as water, minerals, forests, and land itself.
- Labor: It represents the physical and mental efforts of individuals involved in production.
- Capital: Capital refers to the man-made resources used in production, including machinery, equipment, buildings, and infrastructure.
- Entrepreneurship: Entrepreneurship involves the organization and management of resources to create and innovate new products, services, and business ventures.
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Which of the following is the least factor in determining group output? individual role performance Security Sentiments Group standards Money
Among the given options, Sentiments is the least factor in determining group output.
The group output refers to the collective performance of the team or the group working together towards a common goal. The team output can be influenced by various factors, and among them, some of the factors that have a significant impact on team performance are discussed below. This is one of the significant factors that determine group output. Each team member's role, responsibilities, and tasks will have a significant impact on team performance. If the team members are not able to perform their tasks efficiently, it will lead to delays in the project completion and impact the team's overall performance.
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Assume a specific factors economy produces two goods, cloth and food, and that when representing the output of this economy graphically, cloth is on the x-axis and food is on the y-axis When the price of cloth increases by 6% and the price of food does not change, A. the wage rate rises by more than the increase in the price of cloth B. the real incomes of capital owners remain the same. OC. labor shifts from the cloth sector to the food sector. OD. the output of food falls
When the price of cloth increases by 6% and the price of food does not change, the labor shifts from the cloth sector to the food sector. Option C is the correct answer.
In a specific factor economy, capital and labor are specific to the production of a particular good. It implies that the capital and labor used in the production of one commodity are not easily adaptable to the production of other goods. As a result, any improvement in the profitability of a good leads to increased demand for the inputs specific to that good. In this economy, factors of production cannot move from one sector to another in response to the price change of commodities.
In the given scenario, when the price of cloth increases by 6% and the price of food does not change, the real wage rate does not change because it depends on the marginal productivity of labor in each sector, which does not change. In response to the change in prices, labor will shift from the cloth sector to the food sector. Hence, option C is the correct answer.
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What is the map scale at the Equator? 1 cm = 3,000 km 1 cm = 30 km 1 cm = 300 km Question 4 (0.5 points) What would be the approximate scale at 40° N. 01 cm = 2,300 km 1 cm = 230 km 1 cm = 2.3 km E 13 the O 99+ Im Rain...
The map scale refers to the ratio of the distance on the map to the actual ground distance. There are different scales for different regions, and it varies based on the needs of the map user. For instance, maps of a city or state could have a different scale than maps of countries or continents.
The equator is the circle on the Earth that divides the globe into two halves, the Northern and Southern Hemispheres. The length of the equator is approximately 40,000 kilometers, which is the longest circumference on the Earth.1 cm on a map at the equator would be equivalent to 30 km in actual distance.
Therefore, 1:30,000,000 would be the map scale at the equator.At 40° N, the scale would not be the same as the equator. It would be reduced because the meridians converge at higher latitudes.1 cm on a map at 40° N would be equivalent to 230 km in actual distance. Therefore, 1:23,000,000 would be the approximate scale at 40° N.
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is a common business practice to protect your business ideas. A solution is to use a nondisclosure agreement (NDA) before sharing the plan. Post your plans to use such an agreement or any other ways you can protect your idea. In your initial post, discuss if you would use an NDA and provide your reasons for doing so or not doing so. Then comment on the posts of at least three of your classmates and respond to their comments on your post.
Yes, using a nondisclosure agreement (NDA) is a common business practice to protect your business ideas. I would use an NDA because it helps establish a legal framework and ensures that the information shared remains confidential.
Protecting business ideas is crucial, especially in competitive industries where innovation is highly valued. By using an NDA, you can set clear expectations regarding the confidentiality of the information being shared. This agreement legally binds the parties involved and serves as a deterrent against any unauthorized use or disclosure of the ideas.
One of the main reasons for using an NDA is to maintain a competitive advantage. If your business idea is unique and valuable, you want to prevent others from capitalizing on it before you have the chance to bring it to the market. An NDA ensures that the individuals or companies you share your ideas with are legally obligated to keep them confidential, reducing the risk of idea theft.
Additionally, an NDA can be beneficial when engaging in discussions or partnerships with potential investors, co-founders, or employees. It establishes trust and demonstrates your commitment to protecting intellectual property. This can attract more credible and trustworthy individuals to collaborate with, as they see that their interests and your business's interests are safeguarded.
However, it's important to note that an NDA is not foolproof, and its enforcement can be challenging. It's essential to assess the credibility and reputation of the parties involved before sharing sensitive information. Furthermore, an NDA should be well-drafted, covering all necessary clauses to provide comprehensive protection.
In conclusion, using an NDA is a prudent approach to protect your business ideas. It helps maintain confidentiality, establish trust, and deter unauthorized use. However, it's crucial to exercise caution and due diligence when sharing sensitive information, ensuring that the parties involved are trustworthy and reliable.
Now, let's move on to commenting on the posts of three classmates.
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A start-up mobile phone manufacturer who produces motherboards has fixed costs of $320,000 per year and variable costs are $11 per unit. An outside firm can build the same wheel chair at a cost of $22 per unit with annual fixed costs of $6,000. Considering cost alone. what is the quantity where making the wheelchairs and buying them are equal? Round your answer to the nearest whole number, no decimals. If demand is expected to be 25,000 should we make or buy? Enter either the word make or the word buy Round your answer to the nearest whole number, no decimals.
To determine the quantity at which making the wheelchairs and buying them are equal in cost, we need to find the point where the total cost of making is equal to the total cost of buying.
Let's denote the quantity of wheelchairs as Q.
For the manufacturer who produces motherboards:
Total Cost of Making = Fixed Costs + Variable Costs
Total Cost of Making = $320,000 + ($11 * Q)
For the outside firm:
Total Cost of Buying = Fixed Costs + Variable Costs
Total Cost of Buying = $6,000 + ($22 * Q)
To find the quantity where the costs are equal, we can set the two equations equal to each other and solve for Q:
$320,000 + ($11 * Q) = $6,000 + ($22 * Q)
Simplifying the equation:
$320,000 - $6,000 = ($22 - $11) * Q
$314,000 = $11 * Q
Solving for Q:
Q = $314,000 / $11
Q ≈ 28,545
Rounding the quantity to the nearest whole number, the quantity at which making and buying are equal is approximately 28,545.
Given that the expected demand is 25,000, we should make the wheelchairs because the demand is less than the quantity at which making and buying are equal.
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Preferred stock valuation Jones Design wishes to estimate the value of its outstanding preferred stock. The preferred issue has a par value of $90 and pays an annual dividend of $5.20 per share. Similar-risk preferred stocks are currently earning an annual rate of return of 9.8%. a. What is the market value of the outstanding preferred stock? b. If an investor purchases the preferred stock at the value calculated in part a, how much does she gain or lose per share if she sells the stock when the required return on similar-risk preferred stocks has risen to 11.1%? + *** a. The market value of the outstanding preferred stock is $ per share. (Round to the nearest cent.) b. If the required return on similar-risk preferred stocks has risen to 11.1%, the value of the stock will be per share. (Round to the nearest cent.) If an investor purchased the preferred stock at the value calculated in part a and sells the stock when the required return on similar-risk preferred stocks has risen to 11.1%, the gain or loss is $ per share. (Round to the nearest cent. Enter a positive number for a gain and a negative number for a loss.)
To calculate the market value of the outstanding preferred stock, we can use the dividend discount model (DDM).
The value of a preferred stock is determined by dividing its annual dividend by the required rate of return.
a. Market value of the outstanding preferred stock:
Dividend per share = $5.20
Required rate of return = 9.8% = 0.098
Market value = Dividend per share / Required rate of return
Market value = $5.20 / 0.098
Market value ≈ $53.06 per share
Therefore, the market value of the outstanding preferred stock is approximately $53.06 per share.
b. To calculate the value of the stock when the required return on similar-risk preferred stocks has risen to 11.1%, we can use the same formula as above:
Dividend per share = $5.20
Required rate of return = 11.1% = 0.111
Value = Dividend per share / Required rate of return
Value = $5.20 / 0.111
Value ≈ $46.85 per share
Therefore, if the required return on similar-risk preferred stocks has risen to 11.1%, the value of the stock will be approximately $46.85 per share.
To calculate the gain or loss per share, we can subtract the purchase price (market value in part a) from the selling price (value in part b).
Gain or loss per share = Value - Market value
Gain or loss per share = $46.85 - $53.06
Gain or loss per share ≈ -$6.21
Therefore, if an investor purchased the preferred stock at the value calculated in part a and sells the stock when the required return on similar-risk preferred stocks has risen to 11.1%, the gain or loss per share would be approximately -$6.21. This indicates a loss of $6.21 per share.
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vier and Yolanda have original investments of $50,000 and $100,000, respectively, in a artnership. The articles of partnership include the following provisions regarding the division of et income: interest on original investment at 10%; salary allowances of $27,000 and $18,000, espectively; and the remaining income (loss) equally. How much of the net loss of $(6,000) is located to Yolanda? a. $(5,000) b. $(1,000). c. $0 d.$(3,000)
please show calculations
The amount of the loss located to Yolanda is only up to the amount of her investment, which is $-3,000.
Hence, the correct option is (d) $(3,000).
The share of the loss of $6,000 located to Yolanda is $(3,000). Given, vier has an original investment of $50,000 and Yolanda has an original investment of $100,000.The articles of the partnership include the following provisions regarding the division of net income: Interest on the original investment at 10%Salary allowances of $27,000 and $18,000, respectivelyThe remaining income (loss) is divided equally between the two partners.
Using the given details, the interest for Vier and Yolanda on their investments are 10% of $50,000 and 10% of $100,000.
That is, $50,000 x 10/100 = $5,000 for Vier$100,000 x 10/100 = $10,000 for Yolanda
Now, the remaining income to be divided equally is $6,000 - $27,000 - $18,000 - $5,000 - $10,000 = $-4,000 (a loss)Yolanda's share of the loss = 1/2 × -$4,000 = $-2,000Now, Yolanda's share of loss with the interest and salary allowances is $-2,000 - $10,000 - $18,000 = $-30,000. Since the total amount of her investment was only $100,000, she can't have a negative balance as a result of a loss. Therefore, the amount of the loss located to Yolanda is only up to the amount of her investment, which is $-3,000.
Hence, the correct option is (d) $(3,000).
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You are selected to be part of the team in the Raju’s Hill Strawberry Farm located in Cameron Highlands.
(a) Examine the logistics activities throughout the supply chain from raw materials to end user. [25 marks]
(b) Formulate the Integration Strategy to export Cameron Highland's strawberry products to Singapore. [15 marks]
(c) Explain the benefits of implementing Vertical Integration. [10 marks]
PLEASE PROVIDE YOUR ANSWER WITH EXPLANATION IN ESSSAY FORMAT.
Farm logistics can be understood as the process of getting the products from farms to consumers.
The Raju’s Hill Strawberry Farm located in Cameron Highlands is no exception. Here, various logistics activities take place from the cultivation of raw materials to the distribution of the final products to the end-users.Let's examine the logistics activities throughout the supply chain from raw materials to the end-users:Raw Material AcquisitionThe first step in the supply chain is raw material acquisition. In this step, the farm acquires raw materials that will be used in the production process, such as seeds, fertilizers, etc.
At Raju’s Hill Strawberry Farm, this step involves sourcing for quality and disease-resistant seedlings. Production ProcessThe second step is the production process, which includes the cultivation of crops, harvesting, cleaning, and packaging. Here, the farm grows strawberry using hydroponics technology to ensure the consistency and quality of the crops. Raju’s Hill Strawberry Farm has also invested in modern equipment to facilitate the harvesting and packaging process.Storage and TransportationOnce the strawberries are harvested and packaged, they need to be stored and transported to distribution centers. This step involves the use of cold storage facilities to keep the strawberries fresh and extend their shelf life. Raju’s Hill Strawberry Farm has invested in modern refrigeration systems to preserve the quality of their products during transportation.Distribution to Retailers and End-usersThe final step is the distribution of strawberries to retailers and end-users.
Raju’s Hill Strawberry Farm has various distribution channels such as online sales and partnerships with local supermarkets and restaurants. They also provide home delivery services to end-users to increase their reach and convenience.
In conclusion, the logistics activities at Raju’s Hill Strawberry Farm involve raw material acquisition, production, storage, transportation, and distribution. Each of these activities plays a crucial role in ensuring the quality and consistency of their products.Formulating an Integration Strategy to Export Cameron Highland's Strawberry Products to SingaporeTo export the strawberry products to Singapore, Raju’s Hill Strawberry Farm should consider formulating an integration strategy that aligns with its overall business goals and objectives.
They should develop a strong brand identity and marketing campaign that highlights the unique features of their products such as their hydroponic cultivation method and disease-resistant seedlings.Benefits of Implementing Vertical IntegrationVertical integration refers to the process of combining different stages of the supply chain under one entity. Raju’s Hill Strawberry Farm can benefit from vertical integration in the following ways:Cost SavingsVertical integration can help Raju’s Hill Strawberry Farm to reduce the cost of production by eliminating intermediaries and increasing efficiency. This will enable them to offer competitive pricing to their customers and increase their profit margins.Quality ControlVertical integration can help Raju’s Hill Strawberry Farm to have better control over the quality of their products.
By owning the entire supply chain, they can ensure that their products are of high quality and consistent throughout the production process.Improved CoordinationVertical integration can help Raju’s Hill Strawberry Farm to improve coordination and communication between different stages of the supply chain. This will enable them to respond quickly to any changes in demand and ensure timely delivery of their products to customers.In conclusion, vertical integration can help Raju’s Hill Strawberry Farm to reduce costs, improve quality control, and enhance coordination between different stages of the supply chain.
By implementing an integration strategy to export their products to Singapore, Raju’s Hill Strawberry Farm can expand its market reach and increase its profitability.
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Risks and Benefits of CBDCS Some perspective of political
economy would be helpful. What are the updated roles of
governments, central banks, regulatory institutions?.
The introduction of Central Bank Digital Currencies (CBDCs) presents both risks and benefits. From a political economy perspective, CBDCs redefine the roles of governments, central banks, and regulatory institutions.
Governments will have to address issues related to financial inclusion, privacy, and cybersecurity, while central banks will gain enhanced control over monetary policy and financial stability. Regulatory institutions will need to establish frameworks to govern CBDCs and ensure compliance with existing regulations.
CBDCs offer benefits such as increased financial inclusion by providing access to digital financial services to underserved populations. They also offer potential efficiency gains in payment systems, reducing costs and increasing transaction speeds. Additionally, CBDCs can enhance monetary policy effectiveness for central banks by providing direct access to individuals' financial activities and enabling more targeted policy interventions.
However, CBDCs also pose risks. Privacy concerns arise as the use of CBDCs could potentially allow for extensive monitoring of individuals' financial transactions. Cybersecurity threats also become more significant as digital currencies may become attractive targets for hacking and fraud. Governments will need to address these risks and develop robust regulations to ensure privacy protection and cybersecurity measures.
From a political economy perspective, the roles of governments, central banks, and regulatory institutions are evolving. Governments will have to navigate the balance between financial inclusion and privacy concerns, as well as establish appropriate regulatory frameworks for CBDCs. Central banks will gain greater control over the money supply and monetary policy transmission. Regulatory institutions will play a crucial role in overseeing CBDC operations, ensuring compliance with regulations, and safeguarding financial stability and consumer protection.
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Assume you are a trader with Deutsche Bank. From the quote screen on your computer terminal, you notice that Dresdner Bank is quoting EUR/USD at 1.2459 and Credit Suisse is offering USD/CHF at 0.8856. You learn that UBS is making a direct market between the Swiss franc and the euro, with a current EUR/CHF of 1.1047. (Ignore bid-ask spreads for this problem.) Assume you have $5,000,000 with which to conduct the arbitrage. What is the profit or loss if you initially buy Euros with your USD?
If you initially buy Euros with your USD, the loss would be $1,071,473.43.
To calculate the profit or loss, convert USD to Euros, then Euros to Swiss francs, and finally Swiss francs back to USD. The resulting amount in USD is $3,928,526.57. Subtracting the initial amount of $5,000,000 gives a loss of $1,071,473.43.
Calculate the amount of Euros you can buy with $5,000,000:
EUR = USD / EUR/USD rate
EUR = $5,000,000 / 1.2459
Calculate the amount of Swiss Francs (CHF) you can buy with the Euros:
CHF = EUR * EUR/CHF rate
CHF = (USD / EUR/USD rate) * EUR/CHF rate
Convert the CHF back to USD using the USD/CHF rate:
USD (after arbitrage) = CHF * USD/CHF rate
USD (after arbitrage) = [(USD / EUR/USD rate) * EUR/CHF rate] * USD/CHF rate
Calculate the profit or loss:
Profit or Loss = USD (after arbitrage) - Initial USD amount
Let's plug in the given exchange rates:
EUR/USD = 1.2459
USD/CHF = 0.8856
EUR/CHF = 1.1047
Calculate the amount of Euros you can buy with $5,000,000:
EUR = $5,000,000 / 1.2459 ≈ 4,009,686.99 EUR
Calculate the amount of Swiss Francs (CHF) you can buy with the Euros:
CHF = 4,009,686.99 EUR * 1.1047 ≈ 4,430,178.44 CHF
Convert the CHF back to USD using the USD/CHF rate:
USD (after arbitrage) = 4,430,178.44 CHF * 0.8856 ≈ $3,922,286.43 USD
Calculate the profit or loss:
Profit or Loss = $3,922,286.43 USD - $5,000,000 USD ≈ -$1,077,713.57 USD
Therefore, if you initially buy Euros with your USD, you would incur a loss of approximately $1,077,713.57 USD.
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How does Rottenberg (1956) describe the market for a baseball
player’s
services prior to his signing an MLB contract. Who is/are the
seller(s)?
Who is/are the buyer(s)? Who holds market power here?
In Rottenberg's (1956) analysis of the market for a baseball player's services prior to signing an MLB contract, the players are the sellers, the teams or owners are the buyers, and the teams hold market power.
According to Rottenberg's analysis, the market for a baseball player's services operates in a unique manner. Prior to signing a Major League Baseball (MLB) contract, players are considered free agents and have the ability to negotiate with multiple teams to secure the best contract offer.
In this context, the players themselves act as the sellers of their services. They possess a valuable skill set as professional athletes and seek to maximize their earning potential by attracting competitive offers from different teams.
On the other side of the market, the buyers are the MLB teams or owners. They are seeking to acquire talented players to strengthen their teams and increase their chances of success on the field. The teams have the financial resources and bargaining power to make contract offers to the players.
However, it is important to note that the teams hold the market power in this situation. They have multiple advantages, including a larger pool of potential buyers (teams) compared to the limited number of players available for signing. This creates a competitive environment where teams have the upper hand in negotiations and can influence the terms of the contracts.
In the market for a baseball player's services prior to signing an MLB contract, the players act as sellers, offering their skills and services to multiple teams. The teams, as buyers, seek to acquire players and hold market power due to their larger number and financial resources. They have the ability to influence contract terms and negotiations, giving them an advantage over the players in the market.
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On September 1, 2013 Apex Corp. issued 25,000 shares of $0.50 par value common stock for $1.25 per share.
Record the stock issue in general journal form.
On August 15, 2013 Troy Ellison accepted 1,500 shares of $2.50 par common stock at par value for legal services he provided in the formation of XYZ Corp.
Make the journal entry to record the transaction.
On May 12, 2012 Wiley Corporation declared a $75,000 cash dividend on its common stock. The dividend is to be paid on July 1, 2012.
Prepare the journal entries to record the transaction on May 12th & July 1st.
Journal entry for stock issue: Date Accounts Debit Credit Sep 1, 2013Cash 31250 ($1.25 × 25,000) Common Stock 12500 ($0.50 × 25,000) Premium on Common Stock 18750Explanation:Issuing stock for more than the par value generates the premium on the common stock.
Journal entry for accepting shares: Date Accounts Debit Credit Aug 15, 2013Legal Services Expense 3750 ($2.50 × 1,500) Common Stock 3750Explanation:Troy Ellison accepted 1,500 shares of $2.50 par common stock at par value for legal services he provided in the formation of XYZ Corp. The journal entry for accepting 1,500 shares of $2.50 par common stock at par value is recorded as shown above.
Journal entry for the declaration of cash dividend: Date Accounts Debit Credit May 12, 2012Retained Earnings 75,000 Dividends Payable 75,000July 1, 2012Dividends Payable 75,000 Cash 75,000 On May 12, 2012, Wiley Corporation declared a $75,000 cash dividend on its common stock.
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• Explain why an activity considered "corrupt" in one country
might be considered culturally acceptable in another. Please
provide an example(s).
Corruption is considered to be a very serious issue in most countries. However, different cultures have different perceptions of corruption.
In some countries, what is considered corrupt is acceptable in other countries. Examples of activities considered corrupt in one country but culturally acceptable in another include:
Gift-giving: Gift-giving is viewed as a bribe in most Western countries, but it is an acceptable way of doing business in many Asian countries. In many cultures, gift-giving is a sign of respect, gratitude, and good relations between people.
Nepotism: Nepotism is a form of corruption in most Western countries. However, it is acceptable in many African and Asian countries. In these countries, family is considered to be the most important unit of society, and it is expected that people will show favoritism towards their family members over outsiders. Nepotism is seen as a way of helping family members to get ahead and to ensure that they are taken care of by the family.
Patronage: Patronage is another form of corruption that is considered acceptable in many countries. In many African and Asian countries, it is expected that people in power will use their position to help their friends and allies. This is seen as a way of building social networks and ensuring that people are loyal to those in power.
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of the exam to help answer the questions. Asume the US. Demand for steel is Q-100-P and domestic Steel Industry Supply in Q-5-P.6 Note quantity is is billions of tons. 36. How much would consumers spend on steel if there is no international trade? a. 52100 billion b. $300 billion $700 billion d. 5500 billion e. some answer other than the above choices. 37. How much producer surplas would producers receive? a. $450 billion b. 5900 billion c. 51200 billion d. 52100 billion e. some answer other than the above choices. 38. How much consumer surplus would consumers receive? a. 51200 billion b. $2100 billion c. $450 billion d. 5900 billion e. some answer other than the above choices. Suppose the world supply of steel is P-530. Assume imports and exports are now allowed without restriction. 39. What would the total spending on steel be in the United States with free trade in steel? d. 5900 billion $1200 billion b. $2100 billion c. $450 billion 39. What would the total spending on steel be in the United States with free trade in steel? a. $1200 billion b. $2100 billion c. $450 billion d. $900 billion e. some answer other than the above choices. 40. How much steel would be imported into the United States? a. 40 billion b. 60 billion c. 10 billion d. 30 billion e. some answer other than the above choices. 41. How much does the producer surplus of U.S. producers fall? a. $800 billion b. $2100 billion c. $100 billion d. $300 billion e. some answer other than the above choices. 42. How much does consumer surplus increase in the United States? a. $2100 billion b. $1800 billion c. 50 d. $2000 billion e. some answer other than the above choices. 43. How much producer surplus do foreign producers of steel receive? a. $2100 billion b. $800 billion c. 50 d. $2000 billion e. some answer other than the above choices.
The given question of the US. Demand for steel is Q-100-P and domestic Steel Industry Supply in Q-5-P.6 Note quantity is billions of tons have below answer.
36. The domestic Steel Industry Supply is Q=5-P.6.Quantity of steel demanded by consumers is Q=100-P.Combining both equations, we have:100 - P = 5 - 0.6PP = 47Now, the quantity demanded can be calculated as follows: Q = 100 - P = 100 - 47 = 53 billion tons. The amount that consumers spend on steel if there is no international trade would be: Price of steel x Quantity demanded = P x Q = 47 x 53 = $2491 billion. Therefore, the answer is not given in the options.
37. We can calculate the equilibrium price from Q=5-P.6 and Q=100-P:5 - 0.6P = 100 - P0.4P = 95P = 237.5 billion per ton Producer surplus can be calculated as the area above the supply curve and below the price. Producing quantity Q=5-P.6 at price $237.5 would result in a producer surplus of: P.S. = ($237.5 - $0.6) x (5 / 2) = $590.63 billion. Therefore, the answer is not given in the options.
38. Consumer surplus can be calculated as the area below the demand curve and above the price. Producing quantity Q=100-P at price $237.5 would result in a consumer surplus of: C.S. = ($237.5 - $100) x (100 / 2) = $6,875 billion. Therefore, the answer is not given in the options.
39. World supply of steel is P=530.Quantity of steel demanded by consumers is Q=100-P.Combining both equations, we have:100 - P = 530P = 430 billion per ton. The quantity demanded can be calculated as follows: Q = 100 - P = 100 - 430 = -330 billion tons. Since we cannot have a negative quantity, quantity demanded will be 0, but the price will still be $430 billion per ton. Therefore, total spending on steel would be:$430 x 0 = $0 billion. Therefore, the answer is not given in the options.
40. There is no information available to answer this question. Therefore, the answer is not given in the options.
41. With free trade, the domestic industry can sell its products at the world price $530 rather than at the domestic price of $237.5. The new producer surplus would be: P.S. = ($530 - $0.6) x (5 / 2) = $663.5 billion. In this case, the producer surplus would fall by $590.63 billion - $663.5 billion = $72.87 billion. Therefore, the answer is not given in the options.
42. Consumer surplus can be calculated as the area below the demand curve and above the price. Producing quantity Q=100-P at price $530 would result in a consumer surplus of: C.S. = ($530 - $100) x (100 / 2) = $21,500 billion. The consumer surplus would increase by $21,500 billion - $6,875 billion = $14,625 billion. Therefore, the answer is not given in the options.
43. The price in the world market is $530 billion per ton, which can be considered as the price received by foreign producers. The producer surplus would be: P.S. = ($530 - $0.6) x (5 / 2) = $663.5 billion. Therefore, the answer is not given in the options.
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Assuming the SAT scores are nearly normal with N(500, 703. What value represents the 64th percentile of the SAT scores?
The value that represents the 64th percentile of the SAT scores is approximately 515.07.
Given that the SAT scores are nearly normal with N(500, 703)
where μ = 500 and σ = sqrt(703).
We need to find the value that represents the 64th percentile of the SAT scores.
The standard normal distribution is represented by a bell-shaped curve.
If a score is N(0,1) distribution, then the score is said to be in the standard normal distribution.
Therefore, we need to convert N(500, 703) distribution to N(0,1) distribution as follows:
z = (x - μ) / σ
where μ = 500 and σ = sqrt(703)z = (x - 500) / sqrt(703)
Now we need to find the value of x for the 64th percentile, which means 64% of the scores are less than x.
We know that the area to the left of the z-score = 0.64 from the standard normal table.
Therefore, z = invNorm(0.64)z = 0.3614
Now, we can find the value of x as follows:
0.3614 = (x - 500) / sqrt(703)x - 500
= 0.3614 * sqrt(703)x
= 500 + 0.3614 * sqrt(703)x = 515.07
Therefore, the value that represents the 64th percentile of the SAT scores is approximately 515.07.
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Concord Inc. reported beginning inventory of $19400. During the period, purchases were $133000; purchase returns, $3500; and freight in $9800. A physical count of inventory at the end of the period revealed that $29200 was still on hand. The cost of goods available for sale was O $158700. O $148900. O $165700. O $155900.
Option b: the cost of goods available for sale is as per the information provided through the calculation $148900.
Here are the steps to find the cost of goods available for sale:
Beginning Inventory = $19400
Purchases = $133000
Purchase returns = $3500
Freight in = $9800
Adding the above to find the
Total Cost of Goods Available for Sale that are given or provided in the question is obtained by adding the above mentioned values of inventory, purchase returns, purchases and freight in.
= $19400 + $133000 - $3500 + $9800= $148900
Therefore, the cost of goods available for sale is $148900.
Option B: $148900 is the correct answer.
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pizzeria sells pizza for $12 per pie. The cost of ingredients used to produce pizza is $7 per pie. When the fourth worker is employed, the marginal product of labor is 135, so the value of the MPL is S Type your numeric answer and submit 33.75 X You are incorrect
Tthe value of the MPL is 19.2857 in dollars. Marginal Product of Labor (MPL) can be defined as the change in output that arises from the addition of one extra unit of labor. In this case, a pizzeria sells pizza for $12 per pie, and the cost of ingredients used to produce pizza is $7 per pie.
When the fourth worker is employed, the marginal product of labor is 135.
To find the value of the MPL, we need to use the following formula: MPL = ΔQ/ΔL Where, ΔQ is the change in output (which is 135 in this case) and ΔL is the change in labor input (which is 1, as one more worker is added). Therefore, MPL = ΔQ/ΔL= 135/1= 135. Now, we need to find the value of MPL in dollars. To do that, we divide the marginal product of labor by the cost of ingredients used per pie.
MPL in dollars = MPL / Cost per pie -MPL in dollars = 135/7= 19.2857 (approx.)
Therefore, the value of the MPL is 19.2857 in dollars.
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The revenues and expenses of Up-in-the-Air Travel Service for the year ended April 30, 20Y7, follow: Fees earned $1,495,000 Office expense 334,000 Miscellaneous expense 36,000 Wages expense 825,000 Prepare a statement of owner's equity for the year ended April 30, 2017. Jerome Foley, the owner, invested an additional $45,000 in the business during the year and withdrew cash of $32,000 for personal use. Jerome Foley, capital as of May 1, 20Y6, was $675,000. Be sure to complete the statement heading. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. If required, use the minus sign to indicate any decreases in equity.
The statement of owner's equity for Up-in-the-Air Travel Service for the year ended April 30, 20Y7 shows an increase in owner's equity due to fees earned and additional investments made by Jerome Foley.
The statement of owner's equity summarizes the changes in the owner's investment in the business over the course of the year. It starts with the beginning capital balance of Jerome Foley, which was $675,000 as of May 1, 20Y6.
During the year, the business earned fees amounting to $1,495,000, which increased the owner's equity. However, there were expenses incurred as well. The office expense was $334,000, miscellaneous expense was $36,000, and wages expense was $825,000. These expenses reduced the owner's equity.
Additionally, Jerome Foley made an additional investment of $45,000 in the business, which increased the owner's equity. On the other hand, Jerome Foley withdrew $32,000 in cash for personal use, which decreased the owner's equity.
To prepare the statement of owner's equity, we start with the beginning capital balance of $675,000. Then, we add the net income, which is the fees earned minus the total expenses ($1,495,000 - $334,000 - $36,000 - $825,000). Next, we add the additional investment made by Jerome Foley ($45,000) and subtract the personal withdrawal ($32,000). This calculation gives us the ending capital balance, which represents the owner's equity as of April 30, 20Y7.
The statement of owner's equity provides important information for the owner and other stakeholders regarding the financial performance and changes in the owner's investment in the business. It helps in assessing the growth and profitability of the business over time.
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when stuart opens the register, he checks the cash float. there should be a $200 cash float. what's an example of an acceptable cash float? (
An example of an acceptable cash float for Stuart's register could be a combination of various denominations of currency and coins that add up to a total value of $200.
Cash float refers to the disparity between what a business should have and what the bank says a business has. Cash float exists because payments, checks, and money transfers aren't instantaneous. An invoice marked as “paid” in accounting software may still be in processing between two banks
This could include, for instance, ten $20 bills, four $10 bills, ten $5 bills, and twenty $1 bills. Additionally, it may include a mix of coins such as quarters, dimes, nickels, and pennies to complete the $200 cash float. The specific breakdown of the cash float can vary depending on the needs of the business, but it should always total to the designated amount to ensure there is sufficient change available for customer transactions.
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In U.S. markets, there are many substitute products for Fruit Loops cereal, suggesting the price elasticity of demand for Fruit Loops is low. True False
Fruit Loops is a well-known brand of colorful, sugar-coated cereal that is popular among children and adults alike. Kellogg's introduced Fruit Loops to the American market in 1963, and it has been a popular breakfast cereal ever since.
Price elasticity of demand is defined as the percentage change in the quantity demanded in response to a one percent change in the price of a good or service. When the price elasticity of demand is low, it means that the quantity demanded for a good or service is not significantly affected by changes in price, whereas, if the price elasticity of demand is high, it means that even minor price changes can have a significant impact on the quantity demanded. The elasticity of demand can be influenced by a variety of factors, including the availability of substitute goods, the proportion of the buyer's budget spent on the good, and the length of time the good remains in use. Therefore, in the U.S. markets, Fruit Loops cereal has many substitute goods, and as a result, its price elasticity of demand is high. This means that even small changes in the price of Fruit Loops cereal can have a significant impact on the quantity demanded of the cereal.
As mentioned above, Fruit Loops cereal has many substitute products in the United States, which implies that the price elasticity of demand for Fruit Loops is high, not low. When the price elasticity of demand is high, small changes in the price of a good can have a significant impact on the quantity demanded, whereas when it is low, changes in the price of a good do not have a significant effect on the quantity demanded. As a result, even a small change in the price of Fruit Loops cereal can have a significant impact on the quantity demanded.
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Rabbit Ltd makes 3 products - R1, R2 and R3. All three products use the same category of labour which is available for 187,500 hours per period. The standard costs of the products per unit are: R1 R2 R3 $ $ $ Direct Labour ($16.50 per hour) 123.75 74.25 148.50 Maximum demand (units) 9,000 8,000 11,000 Required: Calculate the shortfall in labour hours for the period.
The shortfall in labor hours for the period is 3,153,750 labor hours.
First, let's get an understanding of the maximum demand for each of Rabbit Ltd's products:
Product Maximum Demand (units) R1 9,000 R2 8,000 R3 11,000
Now, let's calculate the total maximum demand:
Total maximum demand = Maximum demand for R1 + Maximum demand for R2 + Maximum demand for R3
= 9,000 + 8,000 + 11,000
= 28,000 units
Now, let's calculate the total labor hours needed for each product:
Product Direct Labor ($16.50 per hour)
Maximum Demand Labor Hours R1 123.75 9,000 1,113,750
R2 74.25 8,000 594,000
R3 148.50 11,000 1,633,500
Total labor hours required = Labor hours required for R1 + Labor hours required for R2 + Labor hours required for R3
= 1,113,750 + 594,000 + 1,633,500
= 3,341,250 labor hours
Since the labor hours available is 187,500, we can calculate the shortfall in labor hours:
Shortfall in labor hours = Total labor hours required - Labor hours available
= 3,341,250 - 187,500
= 3,153,750 labor hours
Therefore, the shortfall in labor hours for the period is 3,153,750 labor hours.
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Hester (age 17) is claimed as a dependent by his parents, Charlton and Abigail. In 2018, Hester received $10,040 of qualified dividends and he received $11,840 from a part-time job. What is his taxable income for 2018? a) $9,880 b) $9,690 c) $20,830 d) $21,880.
Hester's taxable income for 2018 is $9,880. the correct option is not listed among the choices. The correct taxable income for Hester in 2018 is $20,830, not among the provided options of $9,880, $9,690, $20,830, or $21,880.
To determine Hester's taxable income, we need to consider his income sources and any applicable deductions or exemptions. In this case, Hester received $10,040 of qualified dividends and $11,840 from a part-time job. However, as a dependent, he may be subject to certain rules and limitations.
For 2018, the standard deduction for a dependent is $1,050, which reduces the taxable income. Additionally, there may be certain deductions and exemptions specific to Hester's situation. Based on the information provided, we subtract the standard deduction of $1,050 from Hester's total income ($10,040 + $11,840) to calculate his taxable income.
Taxable income = Total income - Standard deduction
= ($10,040 + $11,840) - $1,050
= $21,880 - $1,050
= $20,830
Therefore, Hester's taxable income for 2018 is $20,830.
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Couples tend to ___________the amount of personal information
their partners reveal. (It is an estimate.)
Science has established a clear relationship between __________
and the way people experience
Couples tend to underestimate the amount of personal information their partners reveal. (It is an estimate.)
Science has established a clear relationship between emotions and the way people experience.Emotional responses are an integral part of our lives and how we experience the world around us. The emotions that we feel can influence how we perceive events and interact with others.
Our emotional state can also have an impact on our physical health, as negative emotions have been linked to a range of health problems. Understanding the relationship between emotions and experiences can help us to better manage our emotional responses and improve our overall well-being.
In the context of couples and personal information sharing, research suggests that partners often underestimate the amount of personal information that their significant other is revealing.
This may be due to a range of factors, including differences in communication styles and levels of self-disclosure. Ultimately, couples who are able to communicate effectively and share personal information in a healthy way are more likely to experience greater intimacy and satisfaction in their relationships.
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help please
What is the value in year 10 of a $1,100 cash flow made in year 5 if interest rates are 10 percent? (Do not round intermed calculations. Round your answer to 2 decimal places.) Value in year 10
The value in year 10 of a $1,100 cash flow made in year 5, with an interest rate of 10%, is approximately $683.01.
To calculate the value in year 10 of a $1,100 cash flow made in year 5, we need to discount the cash flow back to year 10 using the interest rate.
- Cash flow made in year 5: $1,100
- Interest rate: 10%
To discount the cash flow, we use the formula for compound interest:
Value in year 10 = Cash flow / (1 + Interest rate)^Number of years
First, let's calculate the discount factor for 5 years:
Discount factor = 1 / (1 + 0.10)^5
Next, we can determine the value in year 10 by multiplying the cash flow by the discount factor:
Value in year 10 = $1,100 * Discount factor
Calculating the discount factor:
Discount factor = 1 / (1 + 0.10)^5
Discount factor = 1 / (1.10)^5
Discount factor ≈ 0.62092
Now, let's calculate the value in year 10:
Value in year 10 = $1,100 * 0.62092
Value in year 10 ≈ $683.01
Therefore, the value in year 10 of a $1,100 cash flow made in year 5, with an interest rate of 10%, is approximately $683.01.
The value in year 10 of a cash flow made in year 5 is obtained by discounting the cash flow back to year 10 using the interest rate. The discount factor is calculated by dividing 1 by the (1 + interest rate) raised to the power of the number of years. Multiplying the cash flow by the discount factor gives us the value in year 10.
In this case, with a $1,100 cash flow made in year 5 and an interest rate of 10%, the discount factor for 5 years is approximately 0.62092. Multiplying the cash flow by the discount factor gives us a value of approximately $683.01 in year 10. This represents the present value of the cash flow in year 10, accounting for the time value of money and the given interest rate.
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20. Find the profit maximizing output level for a production function with one input y = ln(x) given price vector (p, w) where p is the output price and w is the input price. 1/3
21. Calculate Technical Rate of Substitution for the production function f(x₁, 1₂) = ax^²/3_1 + bx₂^1/3
To find the profit maximizing output level for a production function with one input y = ln(x), we need to determine the level of input x that maximizes the profit, given the output price (p) and input price (w). The profit-maximizing output level occurs when the marginal cost equals the marginal revenue, which can be calculated by taking the derivative of the production function with respect to x and setting it equal to p/w.
The technical rate of substitution (TRS) for the production function f(x₁, x₂) = ax₁^2/3 + bx₂^1/3 can be calculated by taking the partial derivative of the production function with respect to x₁, divided by the partial derivative of the production function with respect to x₂. The TRS measures the rate at which one input can be substituted for another while keeping the output constant.
For the production function y = ln(x), the profit-maximizing output level can be found by taking the derivative of the production function with respect to x, which gives us the marginal product of x. Setting the marginal product of x equal to the ratio of the output price (p) and the input price (w) gives us the profit-maximizing condition. Solving this equation will give us the optimal level of x that maximizes profit.
The technical rate of substitution (TRS) for the production function f(x₁, x₂) = ax₁^2/3 + bx₂^1/3 can be calculated by finding the partial derivatives of the production function with respect to x₁ and x₂. Taking the ratio of these partial derivatives gives us the TRS, which represents the slope of the isoquant curve and measures the rate at which one input can be substituted for another while keeping the level of output constant.
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Suppose the inverse demand curve on ore is given by P = X - 0.05 Q. Ore can be either mined or obtained through a recycling program. The marginal cost of mining is MC1 = 9 q1. The marginal cost of obtaining ore through recycling is MC2 = 25 + 2 q2. What should be a maximum value of X so that recycling is NOT cost-effective?
Suppose the inverse demand curve on ore is given by P = X - 0.05 Q, where ore can be either mined or obtained through a recycling program. The marginal cost of mining is MC1 = 9 q1, and the marginal cost of obtaining ore through recycling is MC2 = 25 + 2 q2.
We need to find out the maximum value of X so that recycling is not cost-effective. Let’s start by calculating the profit function for both options, then we’ll equate them and solve for Q to find the breakeven point.The profit function for mining:π1 = P q1 - MC1 q1π1 = (X - 0.05 Q) q1 - 9 q1π1 = (X - 0.05 Q - 9) q1
The profit function for recycling:π2 = P q2 - MC2 q2π2 = (X - 0.05 Q) q2 - (25 + 2 q2)π2 = (X - 0.05 Q - 25) q2Now equate π1 and π2 to find the breakeven point:(X - 0.05 Q - 9) q1 = (X - 0.05 Q - 25) q2Now let's rearrange this equation to solve for Q:q2/q1 = (X - 0.05 Q - 9)/(X - 0.05 Q - 25)q2/q1 = 9/(16 - 0.05
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Holo Company reported the following financial numbers for one of its divisions for the year, average total assets of $5.930,000 sales of $5,505,000; cost of goods sold of $3,290,000; and operating expenses of S1160,000. Assume a target income of 14 average invested assets. Compute residual income for the division Multiple Choice $147700 $284,300 $147747 Next > O $224,800 12 of 25 < Prev MacBook
Residual income refers to the amount of operating income that exceeds the minimum rate of return on the company's net assets.
To compute for the residual income of Holo Company's division, we must first find out the minimum required rate of return on average invested assets. This is computed as follows:Target income = average invested assets x minimum required rate of return14 = 5,930,000 x MRRCross-multiplying, we get:MRRO = 14 / 5,930,000MRRO = 0.002358So the minimum required rate of return is 0.002358 or 0.2358%.To compute for the residual income, we will use the formula:Residual income = Operating income - (Average invested assets x Minimum required rate of return)Operating income is calculated as follows:Gross profit = Sales - Cost of goods soldGross profit = $5,505,000 - $3,290,000Gross profit = $2,215,000Operating income = Gross profit - Operating expensesOperating income = $2,215,000 - $1,160,000Operating income = $1,055,000Using the formula above, we get:Residual income = $1,055,000 - ($5,930,000 x 0.002358)Residual income = $1,055,000 - $14,023.14Residual income = $1,040,976.86Therefore, the residual income for the division is $1,040,976.86.
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U.S Economy 2020 Investment Expenditure $ 2160 Personal Consumption $ 1390 Net Export $809 Nationals abroad $ 250 Government Purchases $4755 Depreciation $445 Foreigners Income (at home) $ 180 Wages and Salaries $ 358 Rent $ 272 1. Using the Expenditure approach model calculate. 1. Gross Domestic Product (GDP) 2. Gross National Product (GNP) 3. Net National Product (NNP) 2. Distinguish between nominal GDP and real GDP
To calculate the GDP, GNP, and NNP using the expenditure approach model based on the given information:
Gross Domestic Product (GDP):
GDP is calculated by summing up all the expenditure components:
GDP = Investment Expenditure + Personal Consumption + Net Exports + Government Purchases
= $2160 + $1390 + $809 + $4755
= $9,114
Gross National Product (GNP):
GNP takes into account the income earned by nationals, both domestically and abroad:
GNP = GDP + Nationals Abroad - Foreigners' Income (at home)
= $9,114 + $250 - $180
= $9,184
Net National Product (NNP):
NNP is calculated by subtracting the depreciation from GNP:
NNP = GNP - Depreciation
= $9,184 - $445
= $8,739
Now, let's distinguish between nominal GDP and real GDP:
Nominal GDP:
Nominal GDP is the value of goods and services produced in an economy using current market prices. It does not take into account changes in price levels over time. In this case, the GDP calculated earlier, $9,114, is the nominal GDP.
Real GDP:
Real GDP adjusts for changes in price levels by using a base year as a reference. It provides a measure of the actual production of goods and services. To calculate real GDP, we need a price index or the inflation rate. Since this information is not provided, we cannot calculate real GDP based on the given data.
Please note that the calculations are based on the information provided, and additional data or adjustments may be required in a real-world analysis.
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Aggregate Demand I-Work It Out: Question 3 Consider an economy with the given equations. • Y=C+I+G • C= 58 +0.6(Y-T) I= 140 10r • (M) = Y - 15r G = $60 • T = $30 • M = $1200 • P= 3.0 Use the relevant set of equations to derive the IS curve and graph it in the accompanying graph by moving points A and B to the correct locations. 30 28 20 24 22 20 10 16 14 12 10 500 700 000 800 (904 8 6 4 2 0 0 100 200 300 400 4 2 0 0 100 200 300 400 Y What is the equation for the IS curve? Y= 500 600 700 800
The equation for the IS curve is Y = 25r - 555. The IS curve equation is given by Y = C + I + G.
Substitute the values of the given equations into the equation to find the equation of the IS curve.
Substituting the given equations:
Y = C + I + G = (58 + 0.6(Y - T)) + 140 - 10r + 60
Simplifying, Y = 258 + 0.6Y - 0.6T - 10r, where T = 30
Therefore, Y = 258 + 0.6Y - 0.6(30) - 10r
Y = 222 + 0.6Y - 10r
0.4Y = 10r - 222Y = (10/0.4)r - (222/0.4)Y = 25r - 555
Graphing this equation on the given diagram, we obtain:
30 28 20 24 22 20 10 16 14 12 10 500 700 000 800 (904 8 6 4 2 0 0 100 200 300 400 4 2 0 0 100 200 300 400 Y
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For the commodity market C=aY+b (00) 1 = cr+d (c<0,d > 0) For the money market Ms = Mo M₁ = k₁Y+k₂r+k₂ (k₁, k₂ > 0, k₂ <0) D (i) Show that when the commodity and money markets are both in equilibrium, the income, Y, and interest rate, r, satisfy the matrix equation 1-a -c b+d k₁ k₂ M₁-k Hint: Commodity market equilibrium implies Y=C+I and money market equilibrium implies M, M, (i.e. money demand equals money supply). (15 Marks) (12 Marks) and deduce that the interest 1 (6.3 Marks). (ii) Using Cramer's rule, solve for the equilibrium interest rate, r. dr (iii) Find the multiplier for r due to changes in Mo, i.e.- ƏM rate falls as the money supply grows.
1. The multiplier for r due to changes in Mo is -k2. 2. the equilibrium interest rate, r is obtained by replacing M1 in the above equation with Mo, which gives r = (1/k2) [(1-a)Y + Mo/k1 - b], 3. multiplier for r due to changes in Mo is -k2.
When the commodity and money markets are both in equilibrium, the income, Y, and interest rate, r, satisfy the matrix equation 1-a -c b+d k₁ k₂ M₁-k. The solution is as follows:
i) Since commodity market equilibrium implies Y = C + I and money market equilibrium implies M, M1 (i.e., money demand equals money supply).
Therefore, we have;
C = aY + b0=cr + dM1 - k1Y - k2r - k2
Because commodity market equilibrium implies Y=C+I, then;I = Y - C = Y - (aY + b)I = (1 - a)Y - b
And since money market equilibrium implies M = M1, then; M = k1Y + k2r + k2
Combining equations yields;(1-a)Y - b = k1Y + k2r + k2cr + dM1r = (1/k2) [(1 - a)Y + M1/k1 - b]We know that c<0, d>0, k1, k2 > 0, and k2 < 0.
Thus, interest rate r is a decreasing function of the money supply M1. When the money supply grows by ΔM1, r falls by -k2ΔM1.
Therefore, the multiplier for r due to changes in Mo is -k2.
ii) Using Cramer's rule for the above equation, we have;
dr/dM1 = ∆r/∆M1 = -k2/(dk1 + ck2)
Therefore, the equilibrium interest rate, r is obtained by replacing M1 in the above equation with Mo, which gives r = (1/k2) [(1-a)Y + Mo/k1 - b].
iii) The multiplier for r due to changes in Mo is -k2.
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