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Licemer1 [7]
3 years ago
7

For commodity X, average cost is equal to marginal cost at every level of output. Assuming that the market for X is competitive

and the demand curve is linear, analyze the effects when a unit tax of u dollars is imposed. Now analyze the effects of the same tax assuming that the market for X is a monopoly. Discuss the differences.
Business
1 answer:
yuradex [85]3 years ago
7 0

Answer:

2 3 For commodity X average cost is equal to marginal cost at every level of from ... curve is linear, analyze the effects when a unit tax of u dollars is imposed. Now analyze the effects of the same tax assuming that the market for X is a monopoly. ... Suppose that the demand curve is (where is the number of gallons of liquor ...

Explanation:

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Joan grows pumpkins. If Joan plants no seeds on her farm, she gets no harvest. If she plants 1 bag of seeds, she gets 500 pumpki
valkas [14]

Answer: Option (B) is correct.

Explanation:

Correct option: Decreasing marginal product.

Marginal product is the change in the level of output, when there will be an extra input employed in the production of a certain commodity.

So, Marginal Product = \frac{change\ in\ Q}{Change\ in\ I}

Where,

Q = Output

I = Input

Marginal product of 1st bag = 500

Marginal product of 2nd bag =  \frac{800-500}{2-1} = 300

Marginal product of 3rd bag =  \frac{900-800}{3-2} = 100

∴ From the above calculations, we can seen that as we employed one more bag of seeds as a result marginal product goes on diminishing.

Hence, Joan's production function exhibits decreasing marginal product.

3 0
4 years ago
Asset A and B have expected returns of 5% and 3% per year respectively. Their annual volatilities are both 20% and the correlati
Novay_Z [31]

Answer:

1. Weight of A=0.5, Weight of B= 0.5

2. Asset A has the highest shape ratio. The weight of A and B in the optimal risky portfolio that has the highest shape ratio is:

Weight of A= 0.105, Weight of B= 0.895

Explanation:

Expected return of Asset A= 5%Expected return of Asset A= 5%

Expected return of Asset B= 3%

Annual volatilities of Asset A= 20%

Annual votalities of Asset B= 20%

1. Correlation coefficient = 30% = 0.3 < 1

Risk Free Rate = 1% =0.01

1. Weight of A and B in portfolio with minimal risk is:

Weight of A= β^2B - Cov (XAXB) /β^2A + β^2B - 2Cov (XAXB)

Therefore,

CovXAXB = PAB (Volatility of A) (Volatility of B)

= 0.3 × 0.2 × 0.2

= 0.012

Hence,

Weight of A= (0.2)^2 - 0.012 / (0.2)^2 + (0.2)^2 - 2(0.012)

Weight of A= 0.04 - 0.012 / 0.04 + 0.04 - 0.024

= 0.028/ 0.08 - 0.024

= 0.028/ 0.056

=0.5

Weight of A = 0.5

Weight of B= 1 - Weight of A

Weight of B= 1 - 0.5

Weight of B= 0.5

2. Shape ratio of A= RA - Rf / β

= 0.05 - 0.01 / 2

= 0.04/2

= 0.02 =20%

Shape ratio of B= RB - Rf / β

= 0.03 - 0.01/ 2

0.02 / 2

=0.01 = 10%

So, Asset A has the highest shape ratio

Cov (XAXB) = PAB (Volatility of A) (Volatility of B)

= 0.03 × 0.2 × 0.1

= 0.006

Weight of A= β^2B - Cov (XAXB) /β^2A + β^2B - 2Cov (XAXB)

Weight of A = (0.1)^2 - 0.006 / (0.2)^2 + (0.1)^2 - 2(0.006)

= 0.01 - 0.006 / 0.04 +0.01 - 0.012

= 0.004/ 0.05 - 0.012

= 0.004/ 0.038

= 0.105

Weight of A = 0.105

Weight of B= 1 - 0.105

Weight of B= 0.895

3 0
3 years ago
Freya plans to invest $3,200 a year for 25 years starting at the end of this year. How much will this investment be worth at the
tekilochka [14]

Answer:

$240,885.11

Explanation:

The formula to be used is = annual payment x annuity factor

Annuity factor = {[(1+r) ^N ] - 1} / r

R = interest rate = 8.2 percent

N = number of years = 25

[(1.082^25) - 1 ] / 0.082 = 75.276598

75.276598 x $3,200 = $240,885.11

I hope my answer helps you

6 0
3 years ago
In social network analysis __________ stress(es) the importance of ties connecting heterogeneous people—helping to ensure a wide
murzikaleks [220]

Answer:

<u>Bridging relationships</u>

Explanation:

Social networking analysis refers to analyzing the interaction between different social groups, people and individuals of an organization.

Such an analysis establishes linkage between diverse people who differ in their attitudes, beliefs and demeanor.  

Such an analysis is aimed at gaining an understanding of a group and it's dynamics, it's key members and deciphering the nature of their association.

Bridging relationships refers to bridging or reducing the gap between a group and laying emphasis upon the relations via which diverse people are interconnected and information is shared between them.

8 0
3 years ago
The following information pertains to Zion Company’s defined benefit pension plan:_______.
kobusy [5.1K]

Answer:

c. $45,000 liability

Explanation:

Fair Value of Plan Asset = Return on asset + employer contribution - Benefit paid

= $22,000 + $40,000 - $0

= $62,000

Projected Benefits Obligation = Service cost + interest cost

= $17,000 + $40,000

= $57,000

Pension asset / (liability) = Opening pension asset/ Liability + Plan asset - Projected Benefit Obligation - Amortization

= $2,000 + $62,000 - $57,000 - $52,000

=  -$45,000

= $45000 Pension Liability

5 0
3 years ago
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