Economics Answers

Ed is a freelance writer who could work for a newspaper at $25,000 a year but instead works
for himself for $41,000 a year. His only business expenses are $1,000 for writing materials and
$12,000 for rent. Ed's normal profit is $1,000. Ed's economic profit from working as a freelance
writer is

Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $3.05 next year. The growth rate in dividends for all three companies is 6 percent. The required return for each company’s stock is 9 percent, 12 percent, and 15 percent, respectively. What is the stock price for each company? (Do not round intermediate calculations and round your answers 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.)

Given an interest rate of 4.2 percent per year, what is the value at date t = 7 of a perpetual stream of $2,600 payments that begins at date t = 15? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

A. Which of the following best describes the relationship illustrated by aggregate demand (AD) curve?
1. The inverse relationship between price and quantity demanded for any product
2. The negative relationship between the price level and levels of total production
3. It shows no relationship between the price level and real GDP
4. The inverse relationship between the price level and real output demanded

B. Based on the international trade effect, how would an increase in the price level in South Africa affect the exchange rate and aggregate demand?
1. rand will appreciate, the quantity of aggregate demand will decrease
2. rand will depreciate, the quantity of aggregate demand will increase
3. exchange rate will remain unchanged, the aggregate demand will decrease
4. exchange rate will increase, the aggregate demand will increase

C. Aggregate spending will increase if
1. real wealth falls
2. Interest rate falls
3. consumption falls
4. investment falls

Discuss the underlying rationale for regulating banks and examine the potential costs associated with regulations.

Explain the specific supply conditions that have affected the price of brazil nuts in 2017.

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.
2. Should Rosaline consume less or more turkey sandwiches to reach equilibrium? Justify.
3. If Rosaline consumes more Turkey Sandwiches and less Juice, her Marginal Utility for consuming Turkey Sandwiches is 160 utils and her Marginal Utility for consuming Juice is 120 utils.
Is this level of consumption maximizing the utility?

if the demand for a product is elastic , then a rise in price will?

The government seeks to eliminate the use of the illegal drug cocaine. The government can! impose penalties on cocaine users or penalties on cocaine suppliers. Assume that the market! for such drugs is perfectly competitive.!
a. Show what would happen when the government imposes penalties on users or!
suppliers using separate diagrams.!
b. Should the government impose penalties on drug users or drug suppliers to achieve!
its objective?!