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You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.50 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What is the value today of $3,100 per year, at a discount rate of 9 percent, if the first payment is received 5 years from today and the last payment is received 15 years from today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
1. The demand for petrol rises from 500 to 600 Barrels when the price of a particular scooter is reduced from Birr. 25000 to Birr.22000. Find out the cross elasticity of demand for the two. What is the nature of their relationship?
A company has the following demand equation
Q= 1000–3000P+10A
Q = Quantity demanded
P = Product Price
A = Advertisement expenditure
Assume that P = 3 and A = 2000
2. Suppose the firm drops the price to Birr. 2.50 would this bebeneficial.
3. Suppose the firm raises the price to Birr. 4.00 While increasingits advertisement expenditure by 100 would this be beneficial? Explain
A company has the following demand equation
Q= 1000–3000P+10A
Q = Quantity demanded
P = Product Price
A = Advertisement expenditure
Assume that P = 3 and A = 2000
2. Suppose the firm drops the price to Birr. 2.50 would this bebeneficial.
3. Suppose the firm raises the price to Birr. 4.00 While increasingits advertisement expenditure by 100 would this be beneficial? Explain
Rosaline consumes only turkey sandwiches and juice and she spends all her income on turkey sandwiches and juice. The marginal utility of her last turkey sandwich consumed is 200 utils and the marginal utility of her last juice consumed is 100 utils. The price of a turkey sandwich is $4 and the price of juice is $3.
1. Is Rosaline maximizing her level of utility? Justify.
1. Is Rosaline maximizing her level of utility? Justify.
3. How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity rise, fall, or remain unchanged?
Use supply and demand curves to verify your answers.
a. Supply decreases and demand is constant.
b. Demand decreases and supply is constant.
Use supply and demand curves to verify your answers.
a. Supply decreases and demand is constant.
b. Demand decreases and supply is constant.
Suppose the market demand function for a good is given by
Q=5p+1000
Find the monopolist total revenue
Q=5p+1000
Find the monopolist total revenue
Perfect price discrimination occurs when
a ) Each customer is charged the maximum price that each is willing & able to pay
b ) the firm sets MR c) senior citizens are offered restaurant discounts
d) the firm charges same price to different customers so that it is equal to the equilibrium price
e) two classes of customers are charges different prices as they have the same elasticities of demand
a monopolist can charge a high price if :
1) the demand for its product is relatively price elastic
2) there exist a large number of substitutes for its products
3) the quantity demanded of its product is positively related to price
4) the demand curve of its product is negatively sloped
5) the demand for its product is relatively price inelastic
1) the demand for its product is relatively price elastic
2) there exist a large number of substitutes for its products
3) the quantity demanded of its product is positively related to price
4) the demand curve of its product is negatively sloped
5) the demand for its product is relatively price inelastic
a. Assume that the reserve ratio in a country is 2%.
(i) Use a formula to calculate the simple money multiplier, show all steps involved in the calculation.
(ii) Suppose that in 2019 customers deposit $200 into their banks. Based on the simple money multiplier calculated in part (i), calculate the total amount which the money supply in the banking system will eventually increase to. Show all steps involved in the calculation.
(iii) Assume the amount of funds deposited by customers in 2020 stands at $400. and the reserve ratio increases to 8%. Will the money supply in the banking system increase, decrease or stay the same from 2019 levels? If it increases or decreases, calculate by how much it will change. If it stays the same, explain why. Show all steps involved in any calculations.
(i) Use a formula to calculate the simple money multiplier, show all steps involved in the calculation.
(ii) Suppose that in 2019 customers deposit $200 into their banks. Based on the simple money multiplier calculated in part (i), calculate the total amount which the money supply in the banking system will eventually increase to. Show all steps involved in the calculation.
(iii) Assume the amount of funds deposited by customers in 2020 stands at $400. and the reserve ratio increases to 8%. Will the money supply in the banking system increase, decrease or stay the same from 2019 levels? If it increases or decreases, calculate by how much it will change. If it stays the same, explain why. Show all steps involved in any calculations.
Economics
Examples of ignoring the law of demand
