Economics Answers

What do you understand by investment function?Explain the factors that influence the level of investment in the economy.

Why is cash management important? What are the two primary motives for holiday cash?

Describe how the annual bond valuation formula is changed to evaluate semi-annual coupon bonds.Then write out the revised formula.

The following information from the national income accounts for a hypothetical country:
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GDP - $6000
Gross investment 800
Net investment 200
Consumption 4000
Government purchase of goods and services 1100
Government budget surplus 30
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What is
1)NDP
2)Net Exports
3)Government taxes minus transfers
4)Disposable personal income
5)Personal saving

Springfield Ironworks (SI) recently had their furnace break down, and need to quickly purchase a new one to minimize the disruption in their production. They can choose a high quality furnace (H) that costs $110,000 with $4,000 of annual maintenance costs for the 7-year life of the furnace, or a low quality furnace (L) that costs $60,000 with $7,500 in annual maintenance costs for the 4-year life of the furnace. Which furnace should SI choose? What is the annualized cost of their choice? Assume a discount rate of 6%, and ignore all taxes.

Assume that a "leader country" has a real GDP per capita of $40,000, whereas a "follower country" has real GDP per capita of $20,000. Next suppose that the growth of real GDP per capita falls to zero percent in the leader country and rises to 7 percent in the follower country. if these rates continue for long periods of time, how many years will it take for the follower country to catch up to the living standard of the leader country.

If I have an equation: C=500+.95(Q-T), how am I able to find C without Q? or vice versa? Thanks!

Royersford Knitting Mills, Ltd., sells a line of women’s knit underwear. The firm now sells about 20,000 pairs a year at an average price of $10 each. Fixed costs amount to $60,000, and total variable costs equal $120,000. The production department has estimated that a 10 percent increase in output would not affect fixed costs but would reduce average variable cost by 40 cents.
The marketing department advocates a price reduction of 5 percent to increase sales, total revenues, and profits. The arc elasticity of demand with respect to prices is estimated at −2.

a. Evaluate the impact of the proposal to cut prices on
(i) total revenue,
(ii) total cost, and
(iii) total profits.

b. If average variable costs are assumed to remain constant over a 10 percent increase in output, evaluate the effects of the proposed price cut on total profits.

Assume that two companies (A and B) are duopolists who produce identical products. Demand for the products is given by the following linear demand function:

p = 200 − Q_A-Q_B

where Q_A and Q_B are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are

TC_A=1500+55Q_A+〖Q^2〗_A
TC_B=1200+20Q_B+2〖Q^2〗_B

Assume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm’s output will not change).

a. Determine the long-run equilibrium output and selling price for each firm.

b. Determine Firm A, Firm B, and total industry profits at the equilibrium solution found in Part (a).

what is Envelope theorem