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Explain Income Elasticity and Cross Elasticity.
R.J. Smith Corporation is a publisher of novels. The Corporation hires an economist to determine the demand for its product. After months of hard work, the analyst tells the company that the demand for the firm's novels (Qx) is given by the following equation:
Qx = 12,000 - 5,000Px + 5I + 500Pc
Where Px is the price charged for the R.J. Smith novels, I is income per capita and Pc is the price of books from competing publishers. Using this information the board of directors want you to
(a) Determine what effect a price increase would have on total revenues.
(b) Evaluate how sales of the novels would change during a period of rising incomes.
(c) Assess the probable impact if competing publishers raise their prices.
Assume initial values of Px, Pc and I are $5, $10,000 and $6 respectively.
- There have been demographic changes- the population of teenagers increased
Assume that the banking system is loaned up and that any open-market purchase by the Fed directly increases reserves in the banks. If the required reserve ratio is 0.2, by how much could the money supply expand if the Fed purchased $2 billion worth of bonds?
Please explain in three well-structured paragraphs the basic arguments stated by the Real-Business-Cycle (RBC) Theory, regarding economic fluctuations.
G&G Consulting has just realized an accounting error that has resulted in an unfunded liability of $455,950 due in 35 years. In other words, the company will need $455,950 in 35 years. Dave Green, the company’s CEO, is scrambling to discount the liability to the present to assist in valuing the firm’s stock. If the appropriate discount rate is 9 percent, what is the present value of the liability?
The rate of economic growth per capita in France from 1996 to 2000 was 1.9% per year, while in Korea over the same period it was 4.2%. Per capita real GDP was $28,900 in France in 2003, and $12,700 in Korea. Assume the growth rates for each country remain the same.
- Compute the doubling time for France’s per capita real GDP.
- Compute the doubling time for Korea’s per capita real GDP.
- What will France’s per capita real GDP be in 2045?
- What will Korea’s per capita real GDP be in 2045?
2. Assume you are a manager of XY Company, while you conduct a vertical analysis it is identified that 85% of the company expenses are incurred for salary. This intern highly affected the profitability of the organization. As a manager what are the possible remedial actions that you suppose to take in order to mitigate this drawbacks?
Suppose Sify broadband is enjoying a monopoly in Delhi as a id is enjoying a monopoly in Delhi as a cable internet provider. They found that there are two primary groups of cust ere are two primary groups of customer identified as businesses and households. The market demand function for business customers Q = 1000-2P, and for households are Q. = 1500-5P, and respectively. They also observed that cost of providing internet is Rs. 100 per customer. a) If the cable internet provider exercises multimarket price discrimination to these two customer groups, determine equilibrium output quantity and price of each group and total profit. b) If Sify decides to charge one price for all, what changes in the volume of profit will you observe?
Design a plan for your own start up and mention it's financial aspects
Qd = 180 - 2P,
Qs = ‐ 15 + P
The market is government-regulated with a price support per unit and production quotas. If the price is set at $72 per unit, what production quota is needed to make sure there are no shortages or surpluses?
a.an increase in the demand for the good. new demand equation is Qd = 190 - 2P. The government is trying to decide between two options:
Maintain the number of quotas and let the market adjust, or
Maintain the price support and increase the number of quotas.
