Economics Answers

A road between Fairbanks and Nome, Alaska, will have a most likely construction cost of $4 million per

mile. Doubling this cost is considered to have a probability of 30%, and cutting it by 25% is considered

to have a probability of 10%. The state’s interest rate is 8%, and the road should last 40 years. What is

the probability distribution of the equivalent annual construction cost per mile?

How would each of the following changes tend to affect the average dividend payout ratios for corporations, other things held constant? Explain your answers.

a.An increase in the personal income tax rate that is applied to dividends.

b.A rise in interest rates.

c.A decline in corporate investment opportunities.

d.Permission for corporations to deduct dividends for tax purposes as they now can do with interest charges

.e.A change in the tax code so that both realized and unrealized capital gains investors earn in any year are taxed at the same rate as dividends.

As an investor, would you rather invest in a firm that has a policy of maintaining (1) a constant payout ratio, (2) a stable, predictable dividend per share with a target dividend growth rate, or (3) a constant regular quarterly dividend plus a year-end extra payment when earnings are sufficiently high or corporate investment needs sufficiently low? Explain your answer, stating how these policies would affect your required rate of return, rs. Also, discuss how your answer might change if you were a student, a 50-year-old professional with peak earnings, or a retiree.

What will happen to the equilibrium quantity and equilibrium price of renewable energy resources if energy sector improves the technology? (Graph is not required

Calculate the equilibrium price and equilibrium quantity of renewable energy resources

Debit Construction Expense

Credit Construction in Progress

• What does this journal entry mean?

Thank you

U(B, M) = 2B + M

Where B and M are the number of books and movies respectively.

a. Explain the shape of the indifference curve using diagram

Do each of a-d, both geometrically (you need not be precise) and using calculus. There are only two goods; x is the quantity of one good and y of the other. Your income is I and u(x,y) = xy + x + y.

(a) Px = $2; Py = $1; I = $15. Suppose Py rises to $2. By how much must I increase in order that you be as well off as before?

D.What is the consumer and producer surplus when the market for toasters is in equilibrium (when the quantities supplied is equal to the quantities demanded)? The inverse demand function is p = 60 - Q and the supply function is Q = 10 + p. Explain your result and draw a very precise graph of the demand and supply functions to show your results.

E. Suppose that the inverse demand function has become p = 80 - Q due to changes in the consumer income but no change in the supply function, Q = 10 + p. What is the new consumer and producer surplus when the market for toasters is in equilibrium (when the quantities supplied is equal to the quantities demanded)? Compare your result with the one you have obtained in (d) and explain the changes in consumer and producer surplus and show it on a diagram

A. If the inverse demand function for toasters is p = 60 - Q , what is the consumer surplus if price (p) is $30? Explain your result and show it very precisely on a diagram.

B. If the inverse demand function for toasters is p = a - b Q , what is the consumer surplus if price is a 2 ? Show it very precisely on a diagram and explain how changes in the constant term (a) and the coefficient of Q (b) cause an increase in the consumer surplus . C. If the supply function for toasters is Q = 10 + p, what is the producer surplus if price is 20? Explain your result and show it on a diagram.