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A firm in a perfectly competitive market has the following cost function c= 1/3q^2-5q^2+3q+10 if the market clearing price is 6 obtain the profit maximizing level of output.
An accountant has debited an asset account for $35000 and credited a revenue account for $50000. What can be done to complete the recording of the transaction?
Credit another asset account for $15000.
Nothing further can be done.
Credit a shareholders’ equity account for $15000.
Debit another asset account for $15000.
Which of the three documentation methods (BPDs, flowcharts, and DFDs) would be most useful to management? To company accountants? To external auditors? To a software engineer developing a new system? For each person, explain your answer. Write a 100 word response.
The text uses only a limited set of the many symbols that can be used to draw a BPD. If you could add five symbols to those listed in the text, what five processes or activities would you want the symbols to represent? Write a 100 word response.
A firm borrows P2,000 for 6 years at 8%. At the end of 6 years, it renews the loan for the amount due plus P2,000 more for 2 years at 8%. What is the lump sum due?
Suppose that the marginal rate of substitution is 2, the price of X is sh 3,and the price of Y is sh.1 a. If the consumer obtains 1 more unit of X, how many units of Y must be given up in order to keep utility constant? b. If the consumer obtains 1 more unit of Y, how units many of X must be given up in order to keep utility constant? c. What is the rate at which the consumer is willing to substitute X for Y? d. What is the rate at which the consumer is able to substitute X for Y ?
Suppose that a consumer consumes two goods X and Y and derives utility according the following utility function where U = 25X2/5Y 3/5 where α = 2/5 and β = 3/5 a. If Px is the price of good X and Py is the price of good Y and the consumer’s income is M. Derive the demand functions for the two goods X and Y b. If Px is shs 15 and Py is shs 10 and the consumer has shs.800 to spend on the two goods what are the optimal quantities of X and Y that maximize the consumer’s utility? c. Using the information in b above show that the values of α and β represent the proportion of the consumer’s income spent on good X and good Y respectively
A consumer must divide shs.250 between the consumption of product X and product Y. The relevant market prices are Px = shs 5 and Py = shs.10. a. Write the equation for the consumer’s budget line. b. Illustrate the consumer’s opportunity set in a carefully labelled diagram. c. Show how the consumer’s opportunity set changes when the price of good X increases to shs.10. How does this change the market rate of substitution between goods X and Y?
One most commonly used utility function is the Cobb-Douglas utility function which of the form 𝑼(𝑿, 𝒀) = 𝑿 𝜶𝒀 𝜷 where α and β are positive constants. a. Show that this function exhibits diminishing marginal utility for both goods X and Y (4mks) b. Show that the indifference curves of this utility function are convex (i.e show that is there is diminishing marginal rate of substitution between X and Y)
Explain, in plain words, what the R-square in this regression indicates. The demand function for good X is 𝐿𝑛𝑄𝑥 𝑑 = 𝑎 − 𝑏𝐿𝑛𝑃𝑥 + 𝑐𝐿𝑛𝑀 + 𝑒 . Where 𝑃𝑥 is the price of good X and M is income. Least squares regression reveals that â = 7.42 , bˆ = 2.81, cˆ =0.34, a. If M = 55,000 and 𝑃𝑥= 4.39, compute the own price elasticity of demand based on these estimates. Determine whether demand is elastic or inelastic. (4mks) b. If M = 55,000 and 𝑃𝑥= 4.39 , compute the income elasticity of demand based on these estimates. Determine whether X is a normal or inferior good
