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Economics of Enterprise
1. What factors might increase the demand for wheat?
Economics of Enterprise
A small firm traps rabbits for their fur and feet. Each rabbit yields one pelt and two feet (only the hind feet are suitable for the "lucky rabbit's feet"). The demand for pelts is:
PP = 2.00 - 0.001QP
and the demand for rabbit's feet is given by:
PF = 1.60 - 0.001QF
The marginal cost of trapping and processing each rabbit is $0.60.
a. What are the profit-maximizing prices and quantities of pelts and rabbit's feet
b. the quantities of pelts and rabbits feet
PP = 2.00 - 0.001QP
and the demand for rabbit's feet is given by:
PF = 1.60 - 0.001QF
The marginal cost of trapping and processing each rabbit is $0.60.
a. What are the profit-maximizing prices and quantities of pelts and rabbit's feet
b. the quantities of pelts and rabbits feet
Economics of Enterprise
Should an insurance company extend commercial property insurance cover to include terrorism risk.
Economics of Enterprise
Given the production function:
Q = 100 + P – 0.01P2 + 2N – 0.03N2
Determine the marginal rate of technical substitution
Q = 100 + P – 0.01P2 + 2N – 0.03N2
Determine the marginal rate of technical substitution
Economics of Enterprise
Suppose you are offered the opportunity of sharing a small stand at a trade fair. The service provided by the stand is to assist job seekers in securing employment. The cost of the stand will be R20000, the cost of promotional material will be R2000, and the partners include a cost of R1000 for their time. The organisers of the fair claim that the likely number of enquiries will average out at 3000. Past exxperience has given a conversion rate of 5% of enquries into actual jobs, and the partners work on an average profit of R200 per job. Assume that the enquries are normally distributed with a standard deviation of 300. Would you take up the offer? Show details of your calculations
Economics of Enterprise
Recommend three policy changes that would make the Federal Reserve’s job of controlling U.S. interest rates easier. Explain your reasoning.
Economics of Enterprise
Use the Internet to find and research a large multinational company in which you might like to invest.
determine the most significant risk factors associated with investing in the company you selected when compared with investing in a domestic company. Provide specific examples to support your response.
determine the most significant risk factors associated with investing in the company you selected when compared with investing in a domestic company. Provide specific examples to support your response.
Economics of Enterprise
4. A product sells for $750 in the United States. The exchange rate is $1 to 1.65 Swiss francs. If purchasing power parity (PPP) holds, what is the price of the product in Switzerland?
a. 123.75 Swiss francs
b. 454.55 Swiss francs
c. 750.00 Swiss francs
d. 1,237.50 Swiss francs
e. 1,650.00 Swiss francs
a. 123.75 Swiss francs
b. 454.55 Swiss francs
c. 750.00 Swiss francs
d. 1,237.50 Swiss francs
e. 1,650.00 Swiss francs
Economics of Enterprise
3. Stover Corporation, a U.S. based importer, makes a purchase of crystal glassware from a firm in Switzerland for 39,960 Swiss francs, or $24,000, at the spot rate of 1.665 francs per dollar. The terms of the purchase are net 90 days, and the U.S. firm wants to cover this trade payable with a forward market hedge to eliminate its exchange rate risk. Suppose the firm completes a forward hedge at the 90-day forward rate of 1.682 francs. If the spot rate in 90 days is actually 1.638 francs, how much will the U.S. firm have saved or lost in U.S. dollars by hedging its exchange rate exposure?
a. -$396
b. -$243
c. $0
d. $243
e. $638
a. -$396
b. -$243
c. $0
d. $243
e. $638
Economics of Enterprise
2. If the spot rate of the Israeli shekel is 5.51 shekels per dollar and the 180-day forward rate is 5.97 shekels per dollar, then the forward rate for the Israeli shekel is selling at a ________________ to the spot rate.
a. premium of 8%
b. premium of 18%
c. discount of 18%
d. discount of 8%
e. premium of 16%
a. premium of 8%
b. premium of 18%
c. discount of 18%
d. discount of 8%
e. premium of 16%
