Answer:
a) 3X + 2Y = 36
b) X = 6 , Y = 9
c) 27
Explanation:
Individual consumes : X and Y
Spends : $36 per time period
unit cost : $3 per unit for X
$2 per unit for Y
utility function : U( X, Y ) = .5XY
<u>A) Budget equation mathematically</u>
X* Px + Y* Py = M
3X + 2Y = 36
Px and Py = unit cost for X and Y
M = Total spent ( revenue )
<u>b) Values of X and Y that will maximize utility </u>
Maximum utility ( MRS ) = Px / Py ,
MRS = MUx / MUy
= Y/X = 3/2
∴ 2Y = 3X
From BC : 6X = 36 ( X = 6 plug into mathematically equation above )
∴ X = 6 , hence Y = 9
<u>c) Total utility generated per unit of time </u>
U( X,Y ) = .5XY
= 0.5 * 6 * 9 = 27
Answer:
Bonds Payable $1000000 Dr
Gain on redemption $15000 Cr
Discount on bonds Payable $10000 Cr
Cash $975000 Cr
Explanation:
The face value of bonds payable is $1000000 while they are a discount bond and carry a discount of $10000. The value of bonds is 1000000 - 10000 = 990000.
The bonds, however, are redeemed at 97.5 which means they are redeemed by paying 97.5% of face value which comes out to be 975000.
Thus, the difference between their value and the redemption price is the gain as value is greater than the price paid for them at redemption.
Gain = 990000 - 975000 = $15000
Answer:
The correct answer is letter "B": limits on interest rates charged by credit card companies.
Explanation:
A Price Ceiling is a maximum amount a seller can charge for a product or service. A regulating authority -usually the local government- enforces price ceilings and they are typically set to protect low-income consumers for being priced-out of markets of essential goods and services.
Apartments provide a common example. Some cities provide price ceilings on what the landlords can charge for rent. A price ceiling in credit card interest rates would all into this category as well.
Answer:
The correct Answer is D.
Explanation:
The topic under question is found in economics of business as Market Failure. The sub topic is Externalities.
<em>Externalities occur when one person's actions (most especially the corporate person under law) affect another person's well-being and the relevant costs and benefits are not reflected in market prices.</em>
An example is given in the question.
The government can sometimes try to solve this through regulation, taxation, and subsidies. However, <em>private solutions </em>do exist as well. An example of such is <em>Charities.</em>
<em>Charities</em> utilize donations from private individuals towards eliminating or stopping actions that result in negative externalities or encouraging behaviors that bring about positive externalities. The former can be seen in the case of organizations that preserve the environment, while the latter is exemplified through organizations that generate money for education.
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